EUROPEAN OPEN: ABDN LN, CCC LN and INVP LN join FTSE 100; Castlelake mulls MSC for EZJ LN bid; CBK GY contacts BaFin over UCG IM; TSM cites ASML NA cost hurdle; AVGO falls after earnings; PSH LN seeks UMG NA stake sale

EUROPEAN OPEN:

• European equities opened mixed; APAC stocks were lower following the negative handover from the US, where risk sentiment was weighed on by the recent retaliatory attacks between the US and Iran, as well as weakness in tech stocks. The Nikkei 225 retreated from record levels amid intervention risks following FX comments from Japanese PM Takaichi, while comments from BoJ Governor Ueda signalled the central bank could resume rate normalisation this month; overnight, sources said the central bank is to mull a hike this month, with another possible in 2026. Elsewhere, the PBoC refrained from open market operations for a second consecutive day.
• President Trump said Iran negotiations are going well and suggested a deal could happen over the weekend, though noted it could take another two to three weeks, sending oil prices lower; oil futures fell after three consecutive sessions of gains, with Brent trading below USD 97/bbl. WSJ reports that Trump privately told aides he would consider ending the ceasefire with Iran only if US troops are killed, suggesting he may tolerate smaller-scale skirmishes for weeks or months to avoid a broader conflict.
• In FX, Bloomberg notes that Asian authorities are increasing FX defence as high energy costs, Fed rate hike bets, a strong USD and capital outflows pressure regional FX; South Korea vowed to curb KRW volatility, Bank Indonesia intensified IDR intervention, Japan said it was ready to respond to JPY moves, and India is considering steps to attract INR inflows (RBI policy announcement is scheduled for tomorrow).
• Gold rose above USD 4,475/oz after Israel and Lebanon agreed a conditional ceasefire contingent on Hezbollah stopping fire, but has pared to around USD 4,465/oz; reports suggest dip-buyers also returned, despite inflation and rate-hike concerns.
• Copper and aluminium extended declines as Middle East uncertainty and a technology stock pullback weighed on sentiment. Iron ore fell to a two-month low as rising supply, soft seasonal steel demand and weaker steelmaking margins pressured sentiment. Bitcoin fell to around USD 61k, its weakest since February, before rebounding above USD 64k; analysts said Strategy’s small sale has pressured sentiment this week, where the crypto asset is down about 13%.
• In data releases, Swedish inflation rose to 0.8% Y/Y in May (exp. 0.5%, prev. -0.1%); Swiss inflation was unchanged at 0.6% Y/Y (exp. 0.8%).
• Looking ahead, highlights include Eurozone Retail Sales, US Challenger layoffs, weekly US jobless claims and other labour market indicators including Revelio PLS and final Chicago Fed labour market indicators, all ahead of Friday’s official jobs data.

STOCK SPECIFICS:

• INDICES: Aberdeen (ABDN LN), Computacenter (CCC LN) and Investec (INVP LN) are to join the FTSE 100, while Berkeley Group (BKG LN), Mondi (MNDI LN) and Rightmove (RMV LN) to move to the FTSE 250; effective 22nd June.
• INDUSTRIALS: Castlelake is considering MSC as a partner for its GBP 3bln bid for easyJet (EZJ LN); the move follows reports that Castlelake is seeking partners to navigate EU ownership rules. Mitie Group (MTO LN) reported FY sales of GBP 5.62bln (exp. 5.65bln), operating profit before other items of GBP 264mln (prev. 234mln Y/Y), and a GBP 16.3bln order book (prev. 15.4bln Y/Y); it launched a GBP 60mln buyback, and remains confident in its FY25-27 plan. Of note for UK defence stocks, PM Starmer is considering watering down plans to boost defence spending by GBP 18ln over concerns that they are unaffordable, according to The Times.
• FINANCIALS: ING (INGA NA) is reportedly preparing a EUR 200mln bid for Spanish bank Singular. Commerzbank (CBK GY) has contacted German regulator BaFin about UniCredit’s (UCG IM) recent disclosures on the take-up of its tender offer, Reuters reports. Lloyds (LLOY LN) affirmed 2026 NII beyond GBP 14.9bln, reflecting a Q1 upgrade from higher rates; QTD lending growth is expected to continue, and the bank expects quarterly sequential NIM increases to continue through 2026. Partners Group (PGHN SW) affirmed FY26 gross new client demand of USD 26-32bln, and expects solid net AuM growth in 2026; the Evergreen platform fundraising is expected to exceed outflows in H1, but slow H2 net AuM growth by 1-2%.
• CONSUMER: Remy Cointreau (RCO FP) aims to boost operating profit by about EUR 100mln by 2028/29 and double travel retail and emerging-market sales under a 3yr transformation plan; FY 2025/26 organic operating profit fell 11.5% to EUR 165.4mln (vs 217mln Y/Y), and it expects organic sales growth and slight margin improvement in 2026/27.
• HEALTHCARE: Novartis (NOVN SW) said Cosentyx PMR data showed clinically meaningful and statistically significant efficacy across the primary and all secondary endpoints, including reduced steroid use. GSK (GSK LN) sees no fixed ideal mix between internal and external R&D, but emphasised that no large pharma can realistically source innovation purely internally; remains open to assets and platforms from the US, Europe, Asia and increasingly China.
• TECH: TSMC (TSM) CEO said customers remain positive on the AI outlook, and demand for advanced semiconductors continues to grow; he signalled interest in raising chip prices, though cautioned against sudden increases. CEO said the company is not using ASML’s (ASML NA) high-NA EUV technology for production due to high costs; it is working to reduce costs and maximise the benefits of high-NA EUV before deploying it in production. Broadcom (AVGO) shares fell almost 12% in extended trading after weaker software sales and a revenue miss were compounded by disappointment that the company did not raise its full-year AI chip sales forecast. CrowdStrike Holdings (CRWD) shares fell 11% in extended trading as a narrow beat and AI momentum failed to offset investor disappointment on guidance, that was only roughly in line with expectations after a strong rally. Nvidia (NVDA) acquired enterprise predictive AI software maker Kumo AI for more than USD 400mln, according to The Information. Autodesk (ADSK) signed a strategic collaboration agreement with AWS (AMZN) to advance cloud-based customer solutions.
• COMMUNICATIONS: Pershing Square (PSH LN) is looking to sell a 4.7% stake in Universal Music Group (UMG NA), comprising 80.6mln shares at a range of EUR 17.66-18.62 per share, according to Bloomberg.
• BROKER UPDATES: Barry Callebaut (BARN SW) was downgraded at Goldman Sachs; Smith & Nephew (SN/ LN) downgraded at Kepler; Autotrader (AUTO LN) and Scout24 (G24 GY) were initiated with Buy Ratings at Goldman Sachs.
• EX-DIVS: Sainsbury (SBRY LN), Vodafone (VOD LN), Marks and Spencer (MKS LN), LondonMetric (LMP LN) and Sage group (SGE LN) will trade without entitlement to their latest dividend.

DAY AHEAD:

• EVENTS: President Trump will receive an intelligence briefing at 16:00BST/11:00EDT. Trump will make an announcement on 'beautiful coal' at 20:00BST/15:00EDT; Secretary of State Rubio will meet with Kuwait’s Foreign Minister at 14:30BST/09:30EDT.
• DATA: Eurozone April retail sales are due (exp. 0.3% Y/Y vs prev. 1.2% Y/Y). In North America, US initial jobless claims for the week of 30th May are seen at 213K (prev. 215K), while continuing claims for the 23rd May week are seen at 1,780K (prev. 1,786K); final Q1 nonfarm productivity is seen at 0.8% (from 1.6%), and unit labour costs at 2.3% (prev. 4.6%). Challenger job cuts for May are also due today (prev. 83.387K). Revelio Public Labour Statistics will also be published. Chicago Fed will release its final May Labour Market Indicators, where the flash is tracking the jobless rate at 4.32% (vs April’s final 4.34%).
• CENTRAL BANKS: Fed’s Bowman (voter) delivers testimony on oversight of prudential regulators; Fed’s Barkin (2027 voter) takes part in a fireside chat; Fed’s Daly (2027 voter) is also due to make remarks today. ECB’s Lagarde (text expected). BoE Governor Bailey speaks at the Investment Association Annual Conference 2026. Riksbank’s Thedeen speaks on the Riksbank’s threshold for securities purchases.
• SUPPLY: France auctions EUR 12-14bln across 2036, 2038, 2042 and 2057 lines. Spain auctions EUR 4.5-5.5bln of 2029, 2031 and 2041 Bonos, and EUR 0.25-0.75bln of 2039 linkers.
• ENERGY: EIA natural gas storage change for the week is expected to print a build of 99bcf (prev. 92bcf).
• EARNINGS: Notable US companies reporting today include: Ciena (CIEN), Brown-Forman (BF-B), Lululemon (LULU), Cooper Companies (COO), DocuSign (DOCU).