EUROPEAN OPEN: AZN LN licenses COPD drug for USD 200mln; AIR FP and MTX GY plan hydrogen engine JV; COTY returns Gucci beauty licence to KER FP; UCG IM to publish final CBK GY bid details; XOM sees liquids prices lifting Q2 earnings

EUROPEAN OPEN:

European equities start lower amid a rise in geopolitical tensions. The US military launched strikes against Iran in response to alleged Iranian attacks on three commercial vessels in the Strait of Hormuz. The US Treasury also revoked its authorisation of Iranian oil sales after Iran attacks earlier in the week. Vortexa data indicates that around 63mln barrels of Iranian oil on tankers have been left in limbo after the license was pulled.
Brent rose above USD 76/bbl, and has reignited energy supply concerns, clouding the inflation and rate outlook. Gold has bounced back to above USD 4,125/oz, after losses on Tuesday.
South Korea’s tech-heavy KOSPI index fell sharply overnight, extending declines from last month’s all-time high to around 20%, and flirting with a technical bear market. Stocks in Hong Kong however surged, with the Hang Seng seeing its largest gain since May 2025, as investors rotated from AI infrastructure into stocks with less-stretched valuations, while China tech shares were supported amid Tuesday’s reports that DeepSeek and Zhipu are developing their own AI chips.
The RBNZ raised its benchmark rate by 25bps to 2.5%, its first hike since 2023, amid lingering inflation pressures from the Iran war; it expects annual headline inflation to have peaked at 3.9% in Q2 2026, and projects a decline to 3.3% in Q3. The decision was reached by consensus, but analysts at Westpac characterised the tone as dovish, with the committee appearing comfortable with an end-2026 OCR in the 2.75-3.0% range, broadly in line with May forecasts. A key rationale was preventing an unintended easing of financial conditions. Westpac expects 25bps rate hikes in September and December 2026, and sees the OCR peaking at 4.0% in September 2027.
Iron ore prices rose on news that workers at BHP’s Port Hedland iron ore terminal will stage an eight-hour strike on 16th July, following over six months of unsuccessful negotiations. Analysts say an eight-hour stoppage would have minimal market impact given China’s high port inventories, but extended action could cause meaningful supply disruptions.
In French politics, Marine Le Pen confirmed she will run in France’s 2027 presidential election, and will appeal her conviction for misusing public funds to France’s top court, which will delay the sentence and allow her to campaign without an electronic monitoring tag. Her National Rally is currently leading in French opinion polls.
In data releases, REC/KPMG suggested that UK hiring fell only marginally in June, with permanent placements returning to pre-Iran war levels and temporary staff demand rising at its fastest pace since 2023; starting salaries rose at the fastest pace since January, though below the historical average.

STOCK SPECIFICS:

HEALTHCARE: AstraZeneca (AZN LN) will license Sino Biopharmaceutical unit’s experimental COPD drug TQC3721, paying USD 200mln upfront; the deal gives AstraZeneca a global licence outside China, and rights to certain future development programmes. Sino Bio’s China unit Chia Tai Tianqing Pharmaceutical also secured mainland China commercialisation rights for GSK’s (GSK LN) respiratory drugs Trelegy Ellipta and Anoro Ellipta.
INDUSTRIALS: Airbus (AIR FP) and MTU Aero Engines (MTX GY) plan to establish a JV to develop and commercialise a fully electric hydrogen fuel cell engine. The JV is expected to start operations in 2027. Poste Italiane (PST IM) has reportedly approved a EUR 372mln capital increase, according to Il Messaggero.
CONSUMER: Of note for EssilorLuxottica (EL FP), Meta Platforms (META) has been advancing a new hardware line of smart glasses that would continuously record audio. Coty (COTY) announces that it has entered into an agreement to transition the Gucci beauty license back to Kering (KER FP) for a consideration of around USD 400mln. Jet2 (JET2 LN) FY26 revenue GBP 7.48bln (vs 7.17bln Y/Y); Summer 2026 on-sale capacity +7.7% vs Summer 2025, while reduced geopolitical uncertainty has driven strong recent booking momentum; remains confident in demand resilience, and announced a new GBP 250mln buyback.
ENERGY: Trans Mountain reached a settlement with oil shippers over tolling, tariffs and service-related matters; the resolution over pipeline fees helps pave the way for a potential equity sale and the proposed new 1mln pipeline announced last week. Exxon (XOM) said Q2 results will be affected by market factors, planned activities, seasonal demand patterns and Middle East-related disruptions; expects higher liquids prices to lift earnings by USD 3.5-3.9bln vs Q1, while gas prices are expected to have an impact of USD -0.2bln to USD 0.2bln. TechnipFMC (FTI) was awarded multiple subsea contracts by Equinor (EQNR NO) for the Omega Sor, Brime, Tyrihans Nord and TWIN projects offshore Norway; the contracts are valued at USD 250-500mln.
MATERIALS: Rio Tinto (RIO LN) will not take over as the operator of Sovereign Metals’ Kasiya Rutile-Graphite Project in Malawi; Rio’s exclusive marketing rights for 40% of production has now lapsed. The US Defence Logistics Agency is seeking offers for approximately 36mln pounds of battery-grade lithium carbonate over five years in a contract worth up to USD 300mln, as the Pentagon builds strategic stockpiles of critical minerals. Canada’s Growth Fund will contribute up to CAD 400mln to Teck Resources’ (TECK) Trail zinc-and-lead smelter in British Columbia, potentially doubling germanium and antimony production and adding gallium capacity for the first time.
FINANCIALS: Santander (SAN SM) has reportedly overhauled its Asia Pacific business under new management by removing its top bank in Beijing. UniCredit (UCG IM) is set to publish final details of its takeover bid for Commerzbank (CBK GY); traders will be looking to see whether UniCredit can secure a majority stake, with the 75% control threshold needed for full control under German law. IG (IGG LN) expects H1 total revenue +18% Y/Y at around GBP 643mln; it also said Q2 trading remained strong, with FY results expected to be in line with market expectations. It also proposed a new Jersey-incorporated holding company and will combine UK & Ireland, Europe, and APAC & Middle East divisions.
REAL ESTATE: Unite (UTG LN) said it is on track for 0-2% LFL income growth in 2026/27, and reiterated FY26 adj. EPS guidance.
NOTABLE BROKER UPDATES: Eni (ENI IM) upgraded at Santander; Forvia (EO FP) upgraded at Citi. Rio Tinto (RIO LN) downgraded at Morgan Stanley; Man Group (EMG LN) downgraded at UBS; Deutsche Lufthansa (LHA GY) downgraded at Citi.

DAY AHEAD:

EVENTS: NATO Summit continues in Ankara; US President Trump will participate in a working session, and deliver press conferences.
DATA: In North America, US wholesale inventories for May are seen rising 0.3% M/M (prev. 0.6%); consumer credit for May will be published in the afternoon (prev. USD 20.73bln). Elsewhere, weekly MBA mortgage applications data will be released. After today’s data, the Atlanta Fed will update its Q2 GDPnow tracking model (yesterday, the gauge was revised up to 1.4% from 1.2%).
CENTRAL BANKS: Meeting minutes from the FOMC’s June confab will be published (full preview below). In Europe, the NBP is expected to keep rates at 3.75%. Hungary’s central bank will publish meeting minutes.
SUPPLY: US auctions USD 39bln of 10-year notes. Germany auctions EUR 6bln of 2036 Bunds. UK holds a GBP 1.5bln tender across 0.125% 2028 and 4.75% 2030 Treasury Gilts.
ENERGY: Weekly DoE energy inventories are due today; after the close on Tuesday, API weekly energy inventory data reportedly showed headline crude stocks posting a smaller than expected draw of -0.399mln bbls (exp. -1.5mln), Cushing stocks drew down by -0.069mln bbls, distillates saw a surprise draw of -1.801mln bbls (exp. +1mln), while gasoline stocks saw a larger than expected draw of -2.929mln bbls (exp. -1.55mln).
PREVIEW - FOMC MINUTES (19:30BST/14:30EDT): The June FOMC minutes will be scrutinised for further insight into policymakers’ appetite for additional rate hikes and the thinking behind the Committee’s hawkish shift at last month’s meeting. The minutes are an account of the June 17th meeting and therefore will not reflect subsequent developments, including the softer-than-expected June nonfarm payrolls report or Chair Warsh’s appearance at the ECB’s Sintra Forum.
Newsquawk’s full FOMC minutes preview can be accessed here.