EUROPEAN OPEN: BRBY LN Q3 beat; RIO LN saw higher copper output, lower iron ore output; BARN SW new CEO; NFLX falls despite beat; UAL rises after earnings

• EUROPEAN OPEN: European equities opened flat/lower. Overnight, Japanese bank and brokerage stocks fell after sharp moves in government bonds raised concerns; JGB liquidity deteriorated to record levels amid a sharp selloff, highlighting a buyers’ strike that has pushed super-long yields higher, BBG said. Citigroup said volatility in JGBs could force risk parity funds to cut exposure, potentially triggering up to USD 130bln of US Treasury selling, and warned that spillovers may prompt broader risk reduction. Chinese stocks rose despite a global selloff, driven by optimism over Beijing’s push for technology self-reliance. Oil prices fell as markets reacted to President Trump’s actions over Greenland, and traders awaited an IEA outlook indicating a large surplus; Brent dropped toward USD 64/bbl, and WTI fell below USD 60/bbl, although WSJ said that losses may be limited by Kazakhstan field shutdowns, which are expected to last at least 10 days. Gold extended its record rally as haven demand was boosted by the crisis over Greenland and turmoil in Japanese government debt markets; T. Rowe Price said gold is expected to retain strong support from price-insensitive central bank buying aimed at reserve diversification, and said that gold could rise toward USD 5,000/oz amid geopolitical and policy uncertainty. In data, UK CPI rose to 3.4% Y/Y in December (exp. 3.3%, prev. 3.2%), with the core rate remaining at 3.2% Y/Y (exp. 3.2%, prev. 3.2%), and services inflation at 4.5% Y/Y (exp. 4.6%). The UK stats office said inflation rose partly due to higher tobacco prices after excise duty increases and increased airfares, likely linked to Christmas and New Year travel timing; these pressures were partly offset by slower rent inflation and lower prices for some recreational and cultural goods. Analysts said despite a hotter headline print, distortions from Budget-driven tobacco changes and elevated airfares apply; core Y/Y was cooler; the data is unlikely to alter expectations that BoE easing is likely this year, with markets still seeing June as the next likely window for a rate cut.
• STOCK SPECIFICS: Of note for UK stocks, the UK and China plan to revive a “golden era” business dialogue during PM Starmer’s planned Beijing visit next week, according to Reuters; executives from firms including AstraZeneca (AZN LN), BP (BP/ LN), HSBC (HSBA LN) and BYD are expected to join a revamped UK-China council aimed at resetting ties. In communications, Netflix (NFLX) shares fell 5.7% in extended US trading, despite a modest earnings beat, as investor focus shifted to the costly and uncertain bidding war for Warner Bros. Discovery (WBD), which overshadowed the quarterly results. Pearson (PSON LN) announced a GBP 350mln share buyback programme. In materials, Rio Tinto (RIO LN) reported Q4 Pilbara iron ore production of 89.7Mt (+4% Y/Y), and said FY25 Pilbara output is expected at the lower end of its 323–338Mt guidance range; it raised 2025 output guidance for bauxite, aluminium and copper, citing operational improvements and project milestones. In consumer sectors, Burberry (BRBY LN) beat Q3 sales expectations, with comparable sales +3% (exp. +2%), helped by its refocus on British heritage and improved Chinese demand; China comps +6%. Sees annual profit in line with market expectations. JD Sports (JD/ LN) reported a 1.8% decline in LFL sales in the nine weeks to 3rd January, worsening slightly vs the 1.7% fall in Q3; improved trading in North America, which generates about 40% of revenue, was offset by weaker European markets. Kering (KER FP) said Bottega Veneta CEO Bartolomeo Rongone will leave in March to pursue new opportunities, adding that the search for the next CEO of Bottega Veneta is underway, with an appointment to be announced in due course. L'Oreal (OR FP) will invest USD 383.4mln to build a beauty tech hub in Hyderabad, aiming to create 2,000 tech jobs through 2030 and serve as a global base for AI-driven beauty innovation. Camfin is set to announce it will not renew its shareholder pact with Sinochem, expiring at the end of May, reshaping Pirelli (PIRC IM) governance, Il Messaggero reports; the move would allow both shareholders to present rival board slates ahead of the June meeting. Barry Callebaut (BARN SW) will appoint former Unilever (ULVR LN) chief Hein Schumacher as CEO, with current CEO Peter Feld leaving on 26th January; the cocoa processor also reported Q1 sales volumes down 9.9% to 509,401 tonnes, below expectations, and confirmed its FY outlook. In financials, UBS (UBSG SW) board is considering external as well as internal candidates to succeed CEO Ermotti next year. In industrials, United Airlines (UAL) shares rose 4.3% in extended US trading after it beat profit expectations, highlighted strong momentum from its loyalty-focused strategy, and issued an outlook that topped forecasts. Of note for Babcock (BAB LN), the UK is pushing talks to sell warships to Denmark amid rising Russian threats in the North Atlantic and strains over Greenland; Defence Secretary Healey and Denmark’s Troels Lund Poulsen are set to discuss a possible sale of Babcock-made Type 31 frigates. In notable broker updates, Goldman Sachs downgrades Admiral (ADM LN), Scor (SCR FP), Swiss Re (SREN SW); Berenberg upgraded Smiths (SMIN LN), downgraded Engie (ENGI FP); Aixtron (AIXA GY) was upgraded at JPMorgan; Nexans (NEX FP) was downgraded at Barclays; Genmab (GMAB DC) was upgraded at DNB Markets.

TODAY'S AGENDA:

• DAY AHEAD: The US Supreme Court will today consider whether President Trump can remove Fed Governor Lisa Cook while allegations against her are contested; the case follows Trump’s earlier attempt to fire Cook and forms part of his broader effort to exert pressure on the Fed. The SCOTUS will also issue a fresh set of opinions, although there is no guarantee we get an update on Trump's tariffs. Traders will continue to monitor commentary from policymakers at Davos; today's schedule includes: US President Donald Trump, ECB President Christine Lagarde, ECB’s Villeroy, EU Economy Commissioner Dombrovskis, IAEA Director General Grossi, Nvidia CEO Huang, JPMorgan CEO Dimon, BlackRock CEO Fink, UBS CEO Ermotti, Standard Chartered CEO Winters, Coinbase CEO Armstrong, TotalEnergies CEO Pouyanne, Sanofi CEO Hudson, Roche Chair Franz Schwan. ECB's Nagel is also on the docket. In terms of data, the UK CBI business optimism index, weekly US MBA mortgage applications, September and October construction spending, December pending home sales, Canada's December PPI and RMPI. In supply, UK will sell GBP 4.75bln of 2029 debt, Germany will sell EUR 1.0bln of 2056 and EUR 1.0bln of 2041 debt, the UST will auction USD 13bln of 20yr bonds. In energy, the IEA will publish its monthly oil market report. US corporate earnings due today include: TEL, JNJ, CFG, TFC, HAL, TDY, TRV, SCHW, PLD, KMI.