EUROPEAN OPEN: BMPS IM launches bids for BAMI IM and BGN IM; HOLN SW buys JHX European units for EUR 840mln; BAVA DC raises outlook, launches buyback; ABT agrees USD 670mln settlement over infant claims; ADS GY upgraded

EUROPEAN OPEN:

• European equities began Friday trade mixed; basic resources leads, healthcare lags. On the week, futures of the broad Stoxx 600 and narrower Euro Stoxx 50 gauge of blue chips are on course for a second week of losses. Overnight, APAC stocks were mixed as the region attempted to shrug-off a broadly negative handover from Wall Street, where risk sentiment was soured amid a rebound in yields and Walmart’s weak sales growth.
• Data out of Japan showed CPI rose to 1.9% Y/Y in July (exp. 1.9%, prev. 1.6%), while core CPI ex-fresh food rose to 1.8% Y/Y (exp. 1.8%, prev. 1.6%), and CPI ex-food and energy printed 1.8% Y/Y (exp. 1.9%, prev. 1.7%). With the BoJ expecting CPI ex-fresh food to rise clearly above 2% in H2, it is widely expected to raise rates by 25bps to 1.25% at its 18th September confab.
• Treasuries stabilised overnight, following volatile trading over the last couple of sessions, as investors questioned the lasting impact of US debt buybacks. The USD weakened slightly. Gold trades around USD 4,540/oz at the start of the European day, on track for a third weekly gain after the US Treasury this week announced plans to expand long-dated debt buybacks.
• Crude is primed for weekly gains, ahead of the US plans to intensify economic pressure on Iran, which is raising fears of disruption in energy markets, as well as souring US-China relations, given China buys around 90% of Iranian oil exports. Brent futures are trading around USD 93.50/bbl, gaining around 6% this week, while WTI is near USD 86.50/bbl.
• In the UK, Chancellor Healey has been warned by investors and analysts to limit Budget borrowing and maintain efforts to reduce the fiscal deficit amid the bond sell-off, FT reports.
• GfK reported UK consumer confidence rose 3 points to -14 in August, its highest level since August 2024, with the index surging 9 points over the past two months; all sentiment indicators improved, with major purchase intentions at their highest since 2021. GfK cautioned however that it is too soon to tell whether the improvement will translate into a sustained recovery in spending given ongoing challenges.
• UK retail sales fell by -0.5% M/M in July (exp. -0.5%), with the annual rate dropping to 1.6% Y/Y (exp. 2.2%, prev. 3.8%). The ex-fuel measure fell by -0.9% M/M (exp. -0.5%), leaving the annual rate at 2.3% Y/Y (exp. 3.3%, prev. 5.0%). Retail sales fell for the first time since April, as earlier promotions pulled purchases forward into June, and warm weather conditions weighed on clothing demand. The data does little to change the BoE’s calculus. Analysts said that the summer confidence boost from warm weather, the World Cup and PM Burnham’s cost-of-living announcements risks being eclipsed by slowing wage growth, higher energy bills and inflationary risks from the Iran war, raising caution that the Burnham bounce may prove short-lived ahead of his first budget in the Autumn.

STOCK SPECIFICS:

• FINANCIALS: Monte Paschi (BMPS IM) launched all-share bids for Banco BPM (BAMI IM) at EUR 25.3bln, and Banca Generali (BGN IM) at EUR 8.7bln, as CEO Luigi Lovaglio seeks to fend off a takeover bid from Intesa Sanpaolo (ISP IM). Monte Paschi also plans an extra dividend of EUR 4bln via a mix of cash and shares from its Generali stake. A shareholder vote on the plan is scheduled for 29th October, requiring two-thirds approval under Italy’s passivity rule. Deutsche Bank (DBK GY) has reportedly hired former Goldman Sachs (GS) traders and at least two senior Morgan Stanley (MS) commodity sales executives as part of a plan to rebuild its energy trading business.
• MATERIALS: Holcim (HOLN SW) is acquiring James Hardie Industries’ (JHX) Fermacell and Aestuver businesses in Europe for EUR 840mln; the transaction is expected to close in H1 2027. James Hardie is exiting Europe to focus on higher-growth markets in the US and Australia.
• CONSUMER DEFENSIVE: AB InBev (ABI BB) announced a USD 13mln investment in its Baldwinsville facility to help meet consumer demand for Michelob ULTRA and Cutwater and expand local manufacturing skills training.
• HEALTHCARE: Bavarian Nordic (BAVA DC) Q2 revenue DKK 2.03bln (exp. 1.55bln); raised FY26 revenue view to about DKK 5.7bln (from 5.5-5.7bln); it also lifted its FY26 EBITDA margin view to about 30% (from 28%) and launched a DKK 750mln share buyback. Abbott (ABT) agreed to pay about USD 670mln to resolve the Gill case and NEC-related claims involving approximately 2K additional infants; the agreements are not admissions of liability. Around 1.7K lawsuits remain pending, involving claims on behalf of approximately 12.7K infants.
• TECH: SK Hynix (000660 KS) is mulling building a memory chip plant in Miyagi, Japan, and could invest trillions of Won into the project. Samsung (005930 KS) will hold a board meeting at 16:00KST/08:00BST to discuss shareholder returns of between KRW 90-110tln.
• NOTABLE BROKER UPDATES: Renault (RNO FP) downgraded at Barclays; Societe Generale (GLE FP) downgraded at Keefe Bruyette; Straumann Holding (STMN SW) downgraded at Deutsche Bank. Adidas (ADS GY) initiated with Buy rating at JPMorgan.

DAY AHEAD:

• EVENTS: US President Trump will deliver remarks in South Carolina at 19:00EDT on Friday.
• DATA: In Europe, Eurozone Q2 negotiated wage growth (exp. 2.5%, prev. 2.46%). August flash PMIs will be released. In North America, US S&P Global flash PMIs: Composite expected at 53.2 (prev. 54.5), services at 54.0 (prev. 54.6), and manufacturing at 53.9 (prev. 53.9). Canadian retail sales are seen rising 0.4% M/M in June (prev. 1.0%).
• CENTRAL BANKS: BoC publishes its Q2 Senior Loan Officer Survey; ECB releases the July consumer expectations survey.
• ENERGY: Baker Hughes reports weekly rig counts (prev. oil 455, gas 128, total 593).
• OPTION EXPIRIES: FTSE 100, Euro Stoxx 50, DAX 40, E-mini S&P/Nasdaq/Dow Jones and CAC 40 Aug 2026 contracts; Bund, Bobl and Schatz Sep options on Sep futures; UST Sep 2026 options.
• CRA: Fitch reviews Poland (A); Moody’s reviews the Netherlands (Aaa) and Sweden (Aaa).