EUROPEAN OPEN: BRBY LN comparable sales rise; VOLCARB SS expects stronger H2 sales; SAABB SS maintains guidance as Q2 sales rise; BMPS IM says ISP IM bid premium too low; DANSKE NO raises profit view; DSY FP in talks for USD 2bln ArisGlobal deal

EUROPEAN OPEN:

• European equities have opened Friday trading lower. On the week, futures of both the broad Stoxx 600 and narrower Euro Stoxx 50 are on course for slight gains, but not fully offsetting last week’s declines. Stocks have now fallen for a second day as investors rotated out of tech, and chipmakers extended losses. Asian chip stocks fell sharply as TSMC’s higher spending plans raised concerns over costs, margins and stretched valuations. EM equities also fell for a second day, while rising crude prices amid US-Iran tensions pressured fuel-importing economies.
• The US struck Iranian airports, transport links, bridges and bases for a sixth night; Iran targeted US-linked sites in the region, claimed an attack in Syria, and further warned on Strait of Hormuz energy flows, stating that regional infrastructure and energy supply chains could be targeted if US strikes continue.
• Oil is primed for its biggest weekly gain since April as US-Iran conflict disrupts Middle East supply, and as security risks around the Strait of Hormuz and Bab el-Mandeb tightened fuel markets, lifting refining margins. Brent trades below USD 85 (+c.12% on the week) as Europe gets underway.
• Fed Vice Chair Jefferson overnight said the Fed may need to reconsider its policy stance if inflation does not start cooling soon, though he described current policy as “well positioned” and stopped short of calling for an immediate hike. Several Fed officials have now warned that rate increases may soon be needed.
• USDJPY has seen downside in recent trade after Japan PM Takaichi said the government will encourage households and pension funds, including GPIF, to invest in domestic financial assets, adding that the GPIF already supports growth through alternative investments, and can rebalance by selling foreign assets and buying domestic assets when the JPY weakens.
• Gold is heading for its biggest weekly decline since early June amid renewed US attacks on Iran, which have increased expectations that the Fed may raise interest rates to contain inflation. Bullion is trading sub-4k/oz as Europe starts. Base metals also declined as traders assessed the prospect of higher US rates and weaker demand.
• In US-China news, President Trump alleged China stole 220mln voter files and tried to influence the 2020 election, though he presented no evidence that voting systems or outcomes were altered. The claims have previously been rejected by US intelligence agencies. China denied interference, and Democrats accused Trump of undermining confidence before the midterms. Analysts say the remarks risk straining ties ahead of Xi Jinping’s planned September US visit.

STOCK SPECIFICS:

• CONSUMER: Burberry (BRBY LN) comparable store sales rose 5% in the April-June quarter, matching expectations, supported by strong US spending; sales in Europe and the Middle East fell 3% as the Iran conflict reduced tourist spending in Europe. Saab (SAABB SS) maintained medium-term guidance, citing strong defence demand; Q2 net profit rose to SEK 2.14bln (from SEK 1.53bln), while sales increased 28% to SEK 25.45bln (exp. 23.88bln); it expects around 22% organic sales growth in 2023-2027, and operating income growth above sales. Volvo Car (VOLCARB SS) expects significantly stronger H2 sales, supported by European growth and continued US recovery, despite weakness in China; it completed SEK 5bln of additional savings six months early, and expects strong positive free cash flow late in H2, ending FY approximately at break-even.
• INDUSTRIALS: Boeing (BA) and Airbus (AIR FP) are reportedly each seeking a major narrowbody order from lessor SMBC Aviation Capital ahead of the Farnborough Air Show; Boeing is in advanced talks for around 100 737 Max jets; Airbus is in discussions for a similarly sized A320neo commitment.
• MATERIALS: Alcoa (AA) cut FY alumina production guidance by 200K-300K tonnes, taking it to 9.5-9.6mln tonnes, citing issues at its Pinjarra refinery in Australia; shipment guidance was reduced by 300K-400K tonnes; AA said alumina prices remained stable despite uncertainty over global shipments caused by the Iran war.
• FINANCIALS: Monte dei Paschi (BMPS IM) board says the premium offered by Intesa Sanpaolo (ISP IM) in its takeover bid is too low, while saying the merger proposal from Banco BPM (BAMI IM) deserves a comprehensive and rigorous assessment. Danske Bank (DANSKE NO) Q2 net profit rose to DKK 6.02bln (exp. DKK 5.92bln), and it raised FY net profit guidance to DKK 23-25bln (from DKK 22-24bln), citing strong customer activity, volume growth and broad-based income gains.
• TECH: Dassault Systemes (DSY FP) is reportedly in talks to acquire drug-trial software maker ArisGlobal from Nordic Capital for about USD 2bln; the deal would expand its life-sciences software business and become its second-largest acquisition.
• COMMUNICATIONS: Netflix (NFLX) shares fell almost 9% in extended US trading as investors were disappointed by its earnings forecast, and scrutiny over engagement updates overshadowed broadly in-line results and continued advertising.
• HEALTHCARE: Novartis (NOVN SW) said the FDA has approved Fabhalta to slow kidney function decline in adults with primary IgA nephropathy. Intuitive Surgical (ISRG) reported softer US procedure growth, which reflected a modest adverse impact from the expiration of enhanced ACA premium subsidies, and its US Da Vinci bariatric cases were pressured by patient use of GLP-1 weight-loss drugs, with bariatric cases down high single digits in the quarter.
• NOTABLE BROKER UPDATES: ASML (ASML NA) upgraded at DZ Bank; BMW (BMW GY) upgraded at HSBC; NatWest (NWG LN) upgraded at Keefe Bruyette; Sodexo (SW FP) upgraded at AlphaValue; Telenor (TEL NO) upgraded at Danske Bank. Lloyds (LLOY LN) downgraded at Keefe Bruyette; Handelsbanken (SHBB SS) downgraded at Citi.

DAY AHEAD:

• DATA: In Europe, Eurozone final June HICP will be released (headline exp. 2.8% Y/Y, core exp. 2.4% Y/Y); Eurozone current account for May (prev. EUR 14.9bln). In North America, preliminary University of Michigan consumer sentiment for July is seen at 51.0 (prev. 49.5), current conditions at 48.7 (prev. 48.0) and expectations at 51.7 (prev. 50.7), while the 1-year inflation gauge is seen at 4.3% (prev. 4.6%) and the 5-year at 3.1% (prev. 3.3%). US housing starts are seen rising to 1.31mln (prev. 1.177mln), and building permits (prev. 1.41mln); industrial production is seen rising 0.2% M/M (prev. 0.1%); import prices are likely to have declined by -0.7% M/M (prev. 1.9%) and export prices are seen easing by -0.4% M/M (prev. 1.3%). After today’s US data releases, the Atlanta Fed will update its GDPNow Q2 estimate (currently tracking growth of 1.7%).
• CENTRAL BANKS: On the speakers’ slate, ECB’s Cipollone will give remarks on the digital Euro.
• ENERGY: Baker Hughes reports weekly rig count data (prev. oil 445, total 581).
• EARNINGS: Notable corporate earnings reports due today include: Travelers (TRV), Truist (TFC), Fifth Third Bancorp (FITB), Regions Financial (RF), Autoliv (ALV).
• OPTION EXPIRIES: FTSE 100, Euro Stoxx 50, DAX 40, CAC 40, E-mini S&P, Nasdaq and Dow Jones Jul 2026 contracts.
• CREDIT RATINGS: Potential reviews are due today from: Scope on Ireland and Sweden; DBRS on the EFSF and ESM; Moody’s on Latvia and Spain; Fitch on Finland and Turkey.