EUROPEAN OPEN: ADS GY misses Q4 sales estimates, guides below expectations; CON GY mixed numbers, sees stable tyre sales; ASM NA tops beat in Q4, sees Q1 above consensus

• EUROPEAN OPEN: European equities are opening in the red, taking a negative lead from Wall Street and APAC trading overnight, where stocks fell as Middle East conflict intensified. South Korean markets among the worst affected, briefly suspending trading twice to curb volatility after sharp falls in the Kospi. The PBoC set the yuan’s daily reference rate stronger despite a rising USD, reversing a recent policy shift that signalled tolerance for currency weakness, as it aims to cushion risks from a stronger USD and rising oil prices. China’s official PMI surveys were mixed in February. On Tuesday, US President Trump said the Navy could begin escorting tankers through the Strait of Hormuz and called for the US International Development Finance Corporation to provide insurance to support maritime trade in the region. Iran hit more than 10 tankers that ignored warnings, and again warned ships against transiting the Strait of Hormuz. Oil extended gains as renewed Middle East attacks and halted traffic through the Strait offset a US plan to insure and potentially escort tankers. Brent approached USD 84/bbl having risen by over 10% in the last two days, the largest increase since 2020. Analysts at Goldman Sachs said Brent could reach USD 100/bbl if the Strait remains closed for over five weeks. Asian LNG spot prices rose above USD 25/MMBtu, the highest since 2023, after Middle East conflict halted shipping through the Strait and forced a shutdown at Qatar’s largest export plant; prices have more than doubled vs last week, with further increases expected while supply disruptions persist, BBG said. Gold rose to around USD 5,150/oz as dip-buyers emerged after bullion prices briefly dipped below USD 5,000/oz on Tuesday. The WSJ cited some analysts who said gold prices could face headwinds as rising energy prices linked to the Middle East conflict prompts investors to reprice expectations for Fed rate cuts, strengthening the USD and lifting bond yields, potentially limiting gains despite safe-haven demand. Money markets have this week seen lowered expectations for Fed rate cuts as the conflict raises concerns about renewed inflation driven by higher oil prices, making it difficult for policymakers to lower rates. Fed’s Kashkari (2026 voter) said the central bank can remain on hold as the Middle East war clouds the outlook, and that one or two rate cuts later in 2026 could be appropriate if inflation cools, but added that the Middle East conflict could also create conditions that justify an extended policy pause. Demand for USD funding has been increasing in the cross-currency swaps market as the Middle East conflict weighs on global risk appetite; the price action signals higher demand for USD vs currencies including the CHF, EUR and GBP, Bloomberg writes.
• STOCK SPECIFICS: Of note for the IBEX, US President Trump says he told Treasury Secretary Bessent to cut off all dealings with Spain; Trump added that he was not happy with UK either. In industrials, Maersk (MAERSKB DC) suspended acceptance of reefer and dangerous cargo across several Middle East markets including the UAE, Oman, Iraq, Kuwait, Qatar, Bahrain, Jordan and Saudi Arabia, and halted new bookings between the India Subcontinent and Upper Gulf markets due to the regional conflict. In materials, BASF (BAS GY) will reportedly increase the prices of additives by up to 20%, citing raw materials, inflation and freight rates. Evonik (EVK GY) confirmed prelim results published in February, and reaffirmed 2026 adj. EBITDA guidance of EUR 1.7-2.0bln; it also proposed a dividend of EUR 1.00/shr. In consumer sectors, Adidas (ADS GY) missed Q4 revenue estimates, though proposed a dividend increase of 40% in combination with share buyback of up to EUR 1.5bln this year; it expects 2026 operating profit of about EUR 2.3bln (exp. 2.7bln), despite a EUR 400mln tariff and currency impact, and it extended its CEO Bjorn Gulden’s contract to 2030. Continental (CON GY) guided 2026 tyre unit sales of EUR 13.2-14.2bln (exp. 14.0bln), with adj. operating margin seen at 13.0-14.5% (exp. 14.0%; prev. 13.6%); its outlook assumes broadly stable demand, and excludes potential impact from the Middle East conflict. In healthcare, the US FDA issued 30 warning letters to telehealth companies over false or misleading marketing of compounded GLP-1 products, including claims implying equivalence with FDA-approved drugs and obscured sourcing. The FDA said a Novo Nordisk (NOVOB DC) ad for Ozempic included misleading claims implying superiority over other GLP-1 diabetes drugs without supporting data; the notice follows a warning issued less than a month earlier over a TV ads for the company’s Wegovy weight-loss treatment. Bayer (BAYN GY) forecast 2026 adj. earnings of EUR 9.6-10.1bln (exp. 9.75bln), and expects profits and sales to be largely unchanged as it faces generic competition for its blood thinner and ongoing uncertainty over US Roundup litigation. Of note for Sanofi (SAN FP), Teva (TEVA) and funds managed by Blackstone (BX) agreed a USD 400mln strategic funding deal over four years to support development of duvakitug; Teva is co-developing the drug with Sanofi. In tech, ASM International (ASM NA) raised its Q1 revenue outlook and expects further increases over the year, citing a rebound in China demand; it announced a new share EUR 150mln buyback programme for 2026-27, and execs said revenue in H2 is expected to be higher than H1, reflecting continued recovery in semi equipment demand, and improving order momentum. CrowdStrike (CRWD) shares slipped in extended US trading despite an earnings beat, after it projected quarterly sales roughly in line with analyst estimates, indicating steady rather than accelerating demand. In notable broker updates, Dassault Systemes (DSY FP) was downgraded at Goldman Sachs; Thales (HO FP) was downgraded at JPMorgan; Kuehne+Nagel (KNIN SW) was downgraded at HSBC; Segro (SGRO LN) was downgraded at UBS; Accor (AC FP) was upgraded at Kepler; Nexans (NEX FP) was upgraded at Barclays.

TODAY’S AGENDA:

• DAY AHEAD: Final global services and composite PMI data are due for release. Eurozone PPI and unemployment data for January will also be published. Poland’s central bank is expected to lower rates by 25bps to 3.75%. The US Day sees the release of weekly MBA mortgage applications data, ISM services for February (headline seen edging lower to 53.5 from 53.8). In energy, API weekly inventory data released afterhours on Tuesday reportedly showed crude stocks posting a larger than expected build of +5.6mln bbls (exp. +2.3mln), Cushing building by +1.5mln bbls, distillates posting a surprise build of +0.5mln bbls (exp. -2.6mln), though gasoline saw a larger than expected draw of -3.3mln bbls (exp. -0.8mln); the more widely followed DoE inventory data will be published later today. In later trade, the Fed will release its latest Beige Book. Today’s speakers’ slate includes ECB VP de Guindos, Cipollone, and BoC Governor Macklem. Notable US corporates reporting today include: Broadcom (AVGO), Brown-Forman (BF.B), Abercrombie & Fitch (ANF). It’s also worth noting that Intel (INTC), Microsoft (MSFT), Nvidia (NVDA), Meta (META), Netflix (NFLX) and Dell (DELL) will be presenting at a Morgan Stanley Tech conference.