EUROPEAN OPEN: Activist Elliott builds stake in AI FP; RKT LN wins first federal NEC bellwether trial; ALC SW joins US most-favoured nation drug pricing deal; NOVN SW pauses eight trials after three fatalities; BNZL LN raises operating profit guidance

EUROPEAN OPEN:

• European equities began lower. Overnight, APAC stocks traded with a mild negative bias amid higher prices and yields, following the recent US-Iran geopolitical flare-up, although some of the losses were trimmed as participants also digested recent data.
• Bloomberg notes that a gauge of global sovereign bond yields has risen to the highest since mid-2008, as oil-driven inflation concerns and expectations of higher interest rates intensified, while budget deficits, corporate issuance and September’s Fed meeting are keeping traders cautious (markets are now pricing a 60%+ chance of a Fed September hike). Overnight, Japan’s 10yr yields rose to the highest since 1996, Australia’s reached levels last seen in 2011, the US 10yr yield hit its highest since January 2025, and US 30yr yields have remained above 5% for 55 days this year, the most since 2006.
• Japan FinMin Katayama said she and US Treasury Secretary Bessent agreed their recent joint FX market intervention was beneficial; Katayama also played down reports that Bessent has been pressing the BoJ to raise its rates. Japan’s 10yr government bond yield touched 3% for the first time since 1996, roughly doubling over the last year, as traders price further BoJ rate hikes, and as fiscal concerns weigh. OIS imply around a 92% probability of a BoJ move by September. Japan’s 10yr bond auction went smoothly after yields rose to 3%; bid-to-cover ratio rose to 3.29x (from 2.56x previously, vs 12-month average of 3.26x). Japan will also sell a 30yr bond on Thursday.
• Gold has steadied near USD 4,445/oz after a two-day decline, amid renewed US-Iran strikes which has lifted inflation and Fed rate hike expectations.
• Crude futures are up for a second day as renewed US-Iran hostilities revived concerns over Strait of Hormuz disruptions. Brent climbed above USD 91/bbl, while WTI traded below USD 87/bbl. Iran attacked targets in the UAE and Jordan, while crude exports through Hormuz continued despite persistent shipping risks. US President Trump said US retaliatory strikes on Iran will be limited, adding that the Strait of Hormuz is in good shape.
• The Netherlands ruling coalition reached a last minute agreement on its first annual budget, averting a political crisis for PM Jetten’s minority government. The draft was submitted before the end-August deadline after two weeks of negotiations; internal divisions over whether to seek support from left- or right-wing opposition parties had delayed the agreement; a parliamentary majority is still not secured. The budget will be presented on 15th September.
• UK PM Burnham will signal new measures to help voters with the cost of living, while decisions on welfare are likely to be delayed until next year, according to the FT.
• In data, China’s RatingDog manufacturing PMI rose to 51.5 in August (exp. 51.0, prev. 50.9); output increased at the fastest pace in three months, while new export business posted its sharpest rise in six months; manufacturers’ confidence for the next 12 months fell to the weakest since January. German retail sales fell by -3.4% M/M in July (exp. 0.4%), with the annual rate dropping to -2.5% Y/Y (from -0.2% previously). UK shop price inflation accelerated to 1.5% Y/Y in August (prev. 0.9%), the fastest pace in more than two years; food prices rose 2.8%, as higher energy and input costs filtered through supply chains. UK Nationwide house prices rose by 0.2% M/M in August (exp. 0.1%), with the annual rate rising to 1.6% Y/Y (exp. 2.1% prev. 1.4%).

STOCK SPECIFICS:

• Of note for UK companies, the UK gained full access to all 11 CPTPP markets on 1st September after Canada ratified its accession; the deal is expected to add around GBP 2bln annually to the UK economy long-term, with over 99% of current goods exports eligible for zero tariffs.
• HEALTHCARE: The Trump administration struck most-favoured nation drug pricing agreements with nine additional pharmaceutical companies, including Alcon (ALC SW). The companies will align outpatient Medicaid drug prices with those charged in foreign countries, and collectively committed USD 19.6bln in US manufacturing investments. President Trump claimed 26 companies representing 90% of the domestic pharmaceutical market have now signed on to the programme. AstraZeneca (AZN LN) announced that its Tagrisso plus Orpathys demonstrated statistically significant and highly clinically meaningful improvement in progression-free survival in 1st-line MET-overexpressing EGFR-mutated lung cancer. Novartis (NOVN SW) has paused 8 clinical trials of an experimental therapy targeting autoimmune and neurological disorders in late August after 3 fatal cases of a severe immune response; elsewhere, its remibrutinib significantly reduces relapse rates and shows favourable safety profile in Phase III RMS trials, and met primary endpoints.
• MATERIALS: FT reports that Elliott Management has built an undisclosed stake in Air Liquide (AI FP), and engaged with the French industrial-gas group; Elliott’s demands were not disclosed.
• CONSUMER STAPLES: Reckitt Benckiser’s (RKT LN) Mead Johnson unit won its first federal bellwether trial over allegations linking premature baby formula to necrotizing enterocolitis; the unanimous verdict leaves Mead Johnson with no outstanding jury verdicts in the litigation.
• CONSUMER CYCLICALS: Of note for beauty names, KKR (KKR)-backed Wella (WELA) has filed for a US IPO on the NYSE.
• COMMUNICATIONS: WPP (WPP LN) is cutting an additional 1,000 jobs by the end of the year as IT undergoes a restructuring plan that will also see non-core businesses and surplus properties offloaded.
• INDUSTRIALS: Bunzl (BNZL LN) H1 revenue GBP 5.93bln (from GBP 5.76bln), attributable profit GBP 211.3mln (from GBP 181.9mln); raised FY26 guidance, now sees modest adj. operating profit growth, and operating margin broadly flat Y/Y (prev. saw a slight decline).
• ENERGY: BP (BP/ LN) said its Whiting oil refinery (440k BPD) is undergoing planned operational activities, which will continue for the next several days.
• FINANCIALS: Partners Group (PGHN SW) H1 revenue CHF 1.12bln (exp. 1.14bln), EBITDA CHF 706mln, operating profit CHF 622mln; net profit -13% Y/Y to CHF 502mln; FY26 new client assets are seen between USD 26-32bln; it additionally announced that CEO David Layton will move to an investment role, with Roberto Cagnati and Juri Jenkner becoming Co-CEOs.
• NOTABLE BROKER UPDATES: Merck KGaA (MRK GY) upgraded at HSBC; Reckitt Benckiser (RKT LN) upgraded at JPMorgan; Orsted (ORSTED DC) upgraded at RBC. Standard Life (SDLF LN) downgraded at UBS; Unite Group (UTG LN) downgraded at Morgan Stanley; Givaudan (GIVN SW) downgraded at Jefferies; Nordea (NDAFI FH) downgraded at Morgan Stanley.

DAY AHEAD:

• EVENTS: President Trump is set to meet representatives of oil refining and fuel distribution companies today to discuss high gasoline prices, domestic refining capacity and potential policy changes. UK PM Burnham will signal new measures to help voters with the cost of living.
• DATA: In Europe, Eurozone August HICP flash headline is expected to rise to 3.3% Y/Y (prev. 2.9%), and the core to 2.5% Y/Y (prev. 2.5%); Eurozone July unemployment is seen unchanged at 6.3%. Final manufacturing PMI data are also due today; Eurozone exp. 52.8 (prev. 51.9), Germany exp. 54.1 (prev. 52.2), France exp. 51.5 (prev. 49.8), UK exp. 51.5 (prev. 51.9). UK mortgage approvals (prev. 58.2K) and consumer credit (prev. GBP 1.807bln) data will be released. In North America, US JOLTS data for July is expected to ease to 7.3mln (prev. 7.359mln); in June, the quits rate was unchanged at 2.0%, while the vacancy rate fell to 4.40% from 4.50%. ISM manufacturing PMI headline is seen easing to 55.2 (from 55.6), prices are seen rising to 72 (prev. 71.1), new orders paring to 56 (prev. 56.7) and employment is seen at 52.5 (prev. 52.8). Construction spending is also due (prev. -0.1% M/M). After today’s data, the Atlanta Fed will update its Q3 GDPNow tracking estimate (prev. 4.61%).
• CENTRAL BANKS: Fed’s Barr (voter, neutral) speaks on the economic outlook; ECB’s Vujcic (neutral) delivers a keynote (text released) and participates in a panel.
• SUPPLY: Germany sells EUR 5.5bln of 2031 Bobls.
• ENERGY: Weekly private energy inventory data from the API are due after the US close.
• EARNINGS: Notable corporates publishing earnings reports today include: Palo Alto Networks (PANW), Dell Technologies (DELL), Medtronic (MDT), NIO (NIO).