EUROPEAN OPEN: ANTO LN sales beat on higher copper prices; IHG LN sees higher FY profits, announces buyback; US to review infant formula ingredients; BAS GY, PHIA NA, SDR LN, OR FP upgraded; NHY NO, ACA FP downgraded

• EUROPEAN OPEN: European equities opened mixed; investors have been focussing on earnings, amid released from Antofagasta and BHP. US equity futures are lower after the Presidents’ Day holiday on Monday, amid further weakness in technology shares. US Treasuries extended last week’s rally as the bond market reopened after a holiday, with benchmark 10yr yields falling towards 4.0%, while yields on 2s edged toward its lowest level since 2022; traders have recently wagered that slowing inflation could enable the Fed to cut rates at least twice this year. There will be focus on this week’s FOMC minutes, Q4 GDP and PCE data for further cues. Asian trading was subdued due to Lunar New Year holidays. Gold fell further below USD 5,000/oz in thin trading conditions, pressured by a stronger USD and easing geopolitical tensions. Bloomberg reports that gold options traders are maintaining bullish positions despite a sharp correction, and have been building December USD 15,000/USD 20,000 call spreads on Comex. Copper and aluminium edged lower in thin trading, as rising LME inventories and tariff uncertainty weighed. Copper fell below USD 12,800/ton, with stockpiles at their highest in over two decades. Oil edged lower as investors focused on talks in Geneva between the US and Iran, and well as talks between Ukraine and Russia. Brent slipped toward USD 68/bbl after rising 1.3% on Monday, while WTI is holding above USD 63/bbl. Citi’s analysts said oil prices may stay supported near term amid tighter enforcement of US sanctions on Russia and Iran, with Brent potentially rising to near USD 70/bbl; the bank expects Russia-Ukraine and Iran peace deals by or during summer. In the UK, unemployment rose to 5.2% in Q4 (exp. 5.1%), its highest since early 2021; regular private-sector wage growth, the BoE’s preferred pay indicator, slowed to 3.4%, the weakest in over five years; average earnings (ex-bonus) were down to 4.2% (exp. 4.2%, prev. 4.4%), and including bonuses, fell to 4.2% (exp. 4.6%, prev. 4.6%). The claimant count change saw 28.6K additions in January (exp. 22.8K). The cooling labour market strengthened expectations that the BoE could cut rates as soon as Spring as wage pressures ease and economic momentum softens. Analysts said the data has a clear dovish skew, with unemployment rising and wage growth moderating, particularly including bonuses, increasing the chance of a March rate cut rather than April if inflation weakness feeds into pay, as Governor Bailey suggested. Markets, which had around 20bps of easing priced for March pre-release, reacted dovishly, though Wednesday’s CPI data remains a decisive input into the BoE’s calculus. Elsewhere, the UK government withdrew plans to postpone 30 local elections scheduled for May after backlash and a lawsuit from the Reform UK party; all local elections will now proceed in May 2026.
• STOCK SPECIFICS: Reuters reports that European earnings growth is improving, with companies representing 57% of market capitalisation reporting average Q4 growth of +3.9% (vs expectations for -1.1%); 60% beat estimates, though share-price reactions have been muted amid valuations at 15.3x forward earnings; banks continue to outperform, while technology results show a wider dispersion. In materials, Antofagasta (ANTO LN) reported 2025 revenue of USD 8.62bln (exp. 8.5bln), as higher copper prices and volumes lifted results. EBITDA rose to USD 5.2bln (exp. 5.15bln), supported by cost controls and USD 115mln in savings. Anto guided FY26 copper output between 650-700k tonnes, capex of USD 3.4bln, and recommended a final dividend of 0.48/shr. Execs said copper’s strong fundamentals, driven by electrification and energy security, supported record prices in 2025 and underpin long-term value. BHP (BHP AT) reported earnings at the upper end of analyst expectations, as stronger copper production and a record metals rally offset weaker iron ore performance. It reported underlying profit +22% Y/Y to 6.2bln (exp. 6.03bln) for the six months to December, and raised its dividend. Copper contributed more than half of group profit for the first time, while acquisitions and improvements at Escondida also supported results. BHP aims to raise up to USD 10bln in asset sales to fund copper expansion, and also announced that it will receive USD 4.3bln upfront from Wheaton Precious Metals under a silver streaming deal linked to its stake in Peru’s Antamina mine. In industrials, Hapag-Lloyd (HLAG GY) on Monday signed an agreement to acquire Zim Integrated Shipping Services (ZIM) for USD 4.2bln; CEO expects deal to result in synergies of between USD 300-500mln a year. In consumer sectors, InterContinental Hotels (IHG LN) reported a +13% rise in FY operating profit to USD 1.27bln (prev. 1.0bln Y/Y), and basic EPS of USD 4.80 (prev. 3.90/ Y/Y); it announced a USD 950mln share buyback, and expects steadier US trading and continued corporate travel growth in 2026. Of note for Nestle (NESN SW) and Danone (BN FP), HHS Secretary RFK Jr. is reportedly preparing to launch a Trump administration review of US infant-formula ingredients, focusing on issues including seed oils and heavy metals; while federal nutrient requirements are widely seen as overdue for re-examination, the administration is said to be unlikely to remove seed oils from formula guidelines. In notable broker updates, BASF (BAS GY) was upgraded at Berenberg; Philips (PHIA NA) was upgraded at AlphaValue; Schroders (SDR LN) was upgraded at Morgan Stanley; L’Oreal (OR FP) upgraded at HSBC; Norsk Hydro (NHY NO) was downgraded at SEB; Credit Agricole (ACA FP) was downgraded at Deutsche Bank.

TODAY’S AGENDA:

• DAY AHEAD: A second round of nuclear negotiations between the US and Iran is set to begin today in Geneva at 08:30GMT, under Omani mediation; follows the initial round of indirect talks in Oman earlier this month. US envoys Steve Witkoff and Jared Kushner will lead talks, with President Trump stating he will be indirectly involved in the talks; Iran’s Foreign Minister Abbas Araghchi is heading the Iranian delegation. Tehran has signalled willingness to consider nuclear constraints in exchange for US sanctions relief, but has also indicated it will not negotiate limits on its missile programme or regional security posture, areas the US seeks to include. Elsewhere, a third round of US-brokered peace talks between Russia and Ukraine are also taking place in Geneva, following two earlier rounds in Abu Dhabi that failed to produce major breakthroughs; talks have shifted beyond humanitarian exchanges to core political and security disputes, especially Russia’s push for recognition of control over parts of eastern Ukraine, including remaining areas of Donetsk, which Kyiv rejects. Talks will also cover security guarantees and future military presence. Expectations for a breakthrough are low, with Ukraine refusing territorial concessions or elections under insecure conditions. In Europe, Germany’s ZEW survey for February is expected to show sentiment rising to 65.0 from 59.6, and current conditions improving to -65.7 from -72.7. Today’s ECB economic bulletin update will focus on ‘drivers of electricity prices, and the importance for EU decarbonisation’. Stateside, weekly ADP jobs data are due (prev. showed an average of +6.5k/week over the four-week period). Elsewhere, the Empire State Manufacturing Index for February, and NAHB housing market index for February are due. Canada will report January inflation metrics, where headline CPI is seen unchanged at 2.4% Y/Y, and the core is seen unchanged at 2.8% Y/Y. In supply, Germany will sell EUR 6bln of 2028 Schatz; BoE will announce of the size of its 2033 auction. Today’s speakers’ slate includes: Fed’s Barr (voter, neutral) on AI and the labour market (we are not expecting a text, but a Q&A is expected), Fed’s Daly (2027 voter, dovish) will also speak on AI (a text and Q&A are expected). Notable companies reporting today include: Palo Alto Networks (PANW), Medtronic (MDT), Cadence Design (CDNS), Republic Services (RSG).
• Click here for Newsquawk's Iran-US talks primer