EUROPEAN OPEN: ASML NA denies reports of EUV shipments to China; EZJ LN rejects third Castlelake approach; BN FP to buy Made Group for c. AUD 2bln; P911 GY prepares cost-cut talks before output cuts; OCDO LN prepares CEO succession

EUROPEAN OPEN:

European equities start the week mostly flat/higher; APAC stocks were mixed overnight amid conflicting headlines on US-Iran negotiations in Switzerland; UK stocks are outperforming with reports suggesting PM Starmer could layout a resignation timetable today. EM stocks rose after the US and Iran agreed a roadmap toward a final peace deal; MSCI’s developing markets index rose to an all-time high, led by tech; Chinese AI-related stocks rallied after Beijing’s supportive policy tone.
Crude initially started the week higher after weekend reports suggested Iran had closed the Strait of Hormuz; however, gains were reversed after a joint mediator statement laying out a roadmap toward a final deal within 60 days, alongside a mechanism to end fighting in Lebanon and a communications line for safe passage through the Strait of Hormuz. Qatar and Pakistan said in a joint statement that “encouraging progress” had been made in the first round of high-level US-Iran peace talks in Switzerland. The mediators indicated that talks would continue through the week, which eased concerns following an earlier threat from President Trump to strike Iran. September Brent fell below USD 80/bbl as sentiment improved around prospects for ending the conflict, while bullion rose towards USD 4,200/oz, recovering last week’s losses. Bloomberg reported that around 6mln bbls of Iranian crude aboard three US-sanctioned supertankers (the Elva, Virgo and Vigor) entered the Strait of Hormuz early Monday, the highest such flow since the war began, according to ship-tracking data; the movements follow the US lifting a blockade last week on ships visiting Iranian ports, and add to roughly 20mln bbls recently exported from Chabahar. Four Qatar-linked empty LNG tankers also signalled Hormuz crossings Monday, which would be the most in a single day since the war started in late February.
Bund futures are positive amid the geopolitical optimism. T-Note futures, however, slipped after President Trump renewed threats of military action against Iran over Hezbollah’s attacks on Israel, and remain lower as the European day begins, with US debt also playing catch-up after holidays on Friday; US 10yr yields rose as much as 5bps to 4.50% in overnight APAC trade, while 2yr yields climbed to 4.22%; analysts also continue to cite Fed Chair Warsh’s hawkish messaging last week, with money markets now pricing in a 25bps hike by September (vs expectations for next March at the start of last week).
Gilts are under pressure and GBP is trading near 2026 lows amid expectations that PM Starmer will set out a resignation timetable, potentially as soon as today, paving the way for Andy Burnham; the pound has now weakened about 2.5% since May 7th local elections, with one-week risk reversals near their most bearish levels for the pound in a month.
Meanwhile, analysts continue to warn that intervention risk for the JPY remains elevated, but that any move alone is unlikely to reverse the currency’s weakness, with a clearer hawkish shift from the BoJ needed to move the JPY from a funding to an investment currency, WSJ writes. April’s FX intervention has not been fully reversed, with the USDJPY trading above 161. Japan’s FinMin Katayama said the ministry would “respond appropriately” in the FX market as needed.
In geopolitics, high-level US-Iran talks in Switzerland concluded, but technical negotiations will continue through the week in Switzerland as sides agreed to a 60-day roadmap toward a final deal. Elsewhere, Israel and Lebanon will begin a fifth round of direct negotiations today, focusing on Israel’s troop presence in southern Lebanon.
In data, Eurozone consumer confidence and Canadian inflation are due. Speakers include Fed’s Waller (voter) and ECB President Lagarde.

STOCK SPECIFICS:

TECH: ASML (ASML NA) has denied shipping an extreme ultraviolet lithography machine, or any related component, to China, after a report suggested that US Commerce Secretary Lutnick raised concerns one of the tools may have reached the country in violation of export restrictions; ASML said it has consistently adjusted its business to comply with export control rules.
CONSUMER: Danone (BN FP) is acquiring Australian dairy and drinks producer Made Group from TPG Capital in a deal worth around AUD 2bln, as part of its expansion into high-protein nutrition; Danone is also acquiring the remaining 49% stake in its fresh dairy joint venture with Saputo Dairy Australia, with both transactions expected to complete in H2. Porsche AG (P911 GY) chief said it is finalising talks on additional cost cuts as it prepares for reduced vehicle production; it expects to reach an agreement with worker representatives by the factory summer break in July. Renault (RNO FP) reportedly plans to abstain from voting on Nissan’s (NSANY) reappointment of director Motoo Nagai and new nominee Junichi Shinbo at the annual shareholders meeting on Tuesday, citing concerns over independence; Proxy advisers ISS and Glass Lewis have recommended voting against Nagai’s reappointment. Of note for EssilorLuxottica (EL FP), Leonardo Maria Del Vecchio has publicly challenged his family’s holding company Delfin to back his EUR 10bln buyout of two siblings ahead of a 30th June shareholder meeting; he accused Delfin’s board of failing to clearly explain its shifting position on the deal; Delfin’s board is reportedly evaluating an alternative buyback of the stakes being sold by Del Vecchio’s siblings. Ocado (OCDO LN) is reportedly preparing to appoint a successor to CEO Tim Steiner, with Vonage CEO Niklas Heuveldop said to have been sounded out; Ocado said that the Board continually engages with potential candidates amid a long-term succession plan. Of note for UK homebuilders, Savills suggests that the number of homes to be built in England will fall over the next two years; it estimates that around 840K homes will be built in the next five years, which would be short of the Government’s 1.5mln target.
FINANCIALS: Lloyds (LLOY LN) plans over 1,000 AI roles in 2026, recruiting almost 300 agentic AI staff while expanding apprenticeships, training, fraud detection and customer-facing tools.
INDUSTRIALS: Castlelake said EasyJet (EZJ LN) has now rejected three non-binding takeover proposals, which started at GBP 5.60/shr and the latest at GBP 6.25/shr, which were made between 16-21st June. Babcock (BAB LN) reported FY26 revenue of GBP 5.177bln (vs 4.83bln Y/Y), operating profit of GBP 305.1mln (vs 363.9mln Y/Y), and EPS of 42.1p (vs 49.1p Y/Y); CEO said it remains on track to deliver on its mid-term guidance.
MATERIALS: China added MP Materials (MP) and USA Rare Earth (USAR) to its export control list, citing national security, in response to the Pentagon’s decision to designate several major Chinese companies as supporting the Chinese military.
HEALTHCARE: Of note for weight-loss drug makers and snacks manufacturers, a PricewaterhouseCoopers survey of more than 2,300 GLP-1 users in the UK found around 70% were spending less on snacks and confectionery, and 60% were buying fewer sugary drinks, with 54% purchasing more high-protein options and 40% spending more on vitamins and supplements; PwC estimates the number of UK GLP-1 users could rise from about 3mln to around 7mln by 2027 as cheaper generics and pill formats become available, following the UK’s approval of Novo Nordisk’s (NOVOB DC) Wegovy pill.
COMMUNICATIONS: Ubisoft (UBI FP) co-founder Claude Guillemot died aged 69; Guillemot was one of two people aboard a Cessna 421 plane that crashed in France.
NOTABLE BROKER UPDATES: BMW (BMW GY) upgraded at Bank of America; Carrefour (CA FP) upgraded at Morgan Stanley; Informa (INF LN) upgraded at Citi.

DAY AHEAD:

EVENTS: High-level US-Iran talks in Switzerland concluded, but technical negotiations will continue through the week in Switzerland as sides agreed to a 60-day roadmap toward a final deal. Israel and Lebanon will begin a fifth round of direct negotiations today, focusing on Israel’s troop presence in southern Lebanon. In the UK, reports suggest UK PM Starmer could layout his resignation timeline as soon as today.
DATA: In Europe, Eurozone flash consumer confidence for June (exp. -17, prev. -19). In North America, Canada May inflation headline is expected to rise 0.6% M/M (prev. 0.4%), and rise to 2.9% Y/Y (prev. 2.8%).
CENTRAL BANKS: ECB Economic Bulletin pre-release on AI and the US labour market. Fed’s Waller (voter, dovish) gives opening remarks. ECB’s Lagarde (neutral) is scheduled to speak several times today, including at an ECON Hearing (text release expected). Czech CNB minutes are due to be published.
EXPIRIES: WTI July 2026 futures expire.
SUPPLY: EU auctions EUR 7bln across 2028, 2036 and 2043 lines.
WEEK AHEAD: Highlights include US PCE, Canadian CPI, EZ Flash PMI, Tokyo CPI, and a Banxico policy announcement. Notable US corporates reporting this week include: Micron (MU), FedEx (FDX), Carnival (CCL), Darden (DRI), Paychex (PAYX), McCormick (MKC), Jefferies (JEF).
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