EUROPEAN OPEN: ECB mulls raising bank reserve requirements; NKE down on cautious demand view; ABF LN sees lower annual profits; PIRC IM plans USD 1.0-1.2bln US investment; SU PA to buy Cognite for USD 3.1bln; SHEL LN sells Gulf interests for USD 1.7bln

EUROPEAN OPEN:

• European equities have opened mixed, but not too far off neutral, following a mixed overnight APAC session, despite the positive momentum from the tech-led gains on Wall St, where the S&P 500 and Nasdaq posted their best quarter in six years.
• China’s RatingDog manufacturing PMI slipped to 51.7 in June (prev. 51.8); the Q2 average reached 51.9, the highest since Q4 2020. New orders rose for a thirteenth month, while input-cost inflation slowed, though economists cited reliance on exports and AI-related technology amid wider economic fragility.
• In Japan, the Q2 Tankan was stronger than expected, with large manufacturers at 22 (exp. 16) and large non-manufacturers at 37 (exp. 35), the highest readings in years; capex plans also beat expectations at 11.5 (exp. 11), while corporate inflation expectations rose. Analysts said the data supports the view that Japan’s economy remains resilient despite geopolitical risks, strengthening the case for further BoJ tightening. Japan’s FX chief Mimura said recent JPY-buying intervention ‘clearly had meaning’, citing the market reaction and noting no US opposition; his comments came as USDJPY trades near 162.80, around a 40-year low for the Japanese currency, keeping traders alert to further action.
• Crude futures have steadied after their biggest quarterly drop since the pandemic; Brent trades around USD 73/bbl, while WTI is near USD 70/bbl. Traders are eyeing the US-Iran talks in Doha, and Strait of Hormuz shipping flows; US envoys Jared Kushner and Steve Witkoff held positive discussions in Qatar, according to an official. No high-level or direct talks are scheduled in the coming days, though technical talks between lower-ranking officials will continue this week. Elsewhere, Trump has discussed resuming full-scale attacks on Iran with Defence Secretary Hegseth and General Caine, according to US officials cited by the WSJ; Trump has opted to continue diplomatic talks for now, believing further attacks could derail diplomacy and efforts to dismantle Iran’s nuclear programme.
• Goldman Sachs said the global oil market is set to return to oversupply as Iran war effects fade and Strait of Hormuz traffic recovers; its analysts see the surplus averaging just over 3mln BPD next year, partly offset by over 1mln BPD of strategic reserve rebuilding.
• Gold is down for a third day as traders weighed Fed hawkishness and US-Iran peace talks; bullion fell below USD 3,980/oz, reaching its lowest level since November. Aluminium fell to its lowest since February, extending losses after a 16% drop in June, as a stronger USD pressured commodities, while the easing Middle East conflict has also weighed, reversing earlier supply-risk gains. Copper also fell, as traders await a US review of refined copper imports which could shape President Trump’s decision on copper import tariffs; Trump previously limited levies to semi-finished products while sparing refined copper, but left open the possibility of future expansion. Traders expect multiple outcomes, including preserved status quo or new tariffs, Bloomberg says.
• Bitcoin fell to a 21-month low as higher-rate expectations and concerns about Strategy, the token’s largest corporate buyer, weighed on sentiment; Citigroup cut its 12-month Bitcoin forecast to USD 82K (from USD 112K) and reduced its 12-month Ethereum forecast to USD 2.24K (from USD 3.175K).
• Traders will today be looking to the final day of the ECB’s Sintra forum, where a panel featuring ECB President Lagarde, Fed Chair Warsh, BoE Governor Bailey, BoC Governor Macklem will take place. Talks are continuing in Doha on Iran-US. Additionally, ahead of Thursday’s US jobs data, the ADP, Challenger and Revelio figures are eyed.

STOCK SPECIFICS:

• TECH: Apple (AAPL) CEO Tim Cook and EU tech chief Henna Virkkunen held constructive talks on Apple’s planned Siri AI launch in Europe, FT reports. Microsoft (MSFT) plans to announce fresh job cuts affecting thousands of roles, including sales, consulting and Xbox, Business Insider reports. Anthropic said the US government has lifted export restrictions on Claude Fable 5 and Mythos 5, with access to resume on Wednesday.
• FINANCIALS: The ECB is considering raising banks’ minimum reserve requirements to 2% of customer deposits (from 1%), Reuters reports; the move would aim to reduce the ECB’s interest bill and mitigate inflation-related side effects; a decision expected in the Autumn. Schroders (SDR LN) is close to selling financial planning arm Benchmark Capital to Soderberg & Partners for more than GBP 200mln, according to the FT; the sale would support its focus on UHNW clients.
• ENERGY: Shell (SHEL) agreed to sell its interests in the Na Kika platform, associated Gulf of America fields and the Coulomb tieback to subsidiaries of Talos Energy and Ridgewood Energy for USD 1.7bln.
• CONSUMER: Nike (NKE) shares fell 3% in extended trading as cautious demand commentary, pressure on consumers worldwide and ongoing weakness in Greater China outweighed stronger-than-expected results. Constellation Brands (STZ) shares rose 2.5% in extended trading after better-than-expected results, resilient beer sales and reaffirmed profit guidance outweighed a revenue decline linked to wine and spirits divestitures. Associated British Foods (ABF LN) still expects annual profit below the prior year, after it reported flat Q3 revenue; Primark, which ABF plans to spin-off from its food businesses, saw revenue up 3%. Pirelli (PIRC IM) said it plans a multi-year US investment programme worth USD 1.0-1.2bln to increase production capacity in the country. BMW (BMW GY) will buyback up to EUR 625mln in shares as part of its third tranche of its share buyback programme.
• INDUSTRIALS: BayWa (BYW GY) reached an understanding in principle to adjust its restructuring agreement with key creditors and major shareholders; the adjustment would extend financial liabilities until the end of 2030 and provide interest relief. Schneider Electric (SU PA) agreed to AI software and industrial data provider Cognite Holding for USD 3.1bln in cash; Cognite will be integrated into Schneider’s industrial software business, AVEVA; completion is expected in coming quarters. KNDS is struggling to convince investors to back its planned IPO at a valuation above EUR 12bln, with some telling the Franco-German tankmaker in preliminary talks that it is worth less, FT reports. The German family shareholder, which holds 50% alongside the French government, will not proceed below EUR 12.5bln, while valuations of EUR 18-20bln had been discussed earlier this year. A final decision is likely next week, with postponement possible if demand is insufficient.
• MATERIALS: Alcoa (AA) will acquire South32’s (SOUHY) bauxite, alumina and aluminium assets for upfront consideration of about USD 4.1bln; deal is expected to close in H1 2027. Teck Resources (TECK) mailed a letter of transmittal and election form to registered holders of its Class A and Class B shares regarding its merger of equals with Anglo American (AAL LN); each Teck share will be exchanged for 1.3301 Anglo American ordinary shares, or exchangeable shares for eligible Canadian shareholders who elect that option.
• NOTABLE BROKER UPDATES: Segro (SGRO LN) initiated with Neutral rating at BNP Paribas; Equinor (EQNR NO) upgraded at Nordea; Nokia (NOKIA FH) upgraded at Danske Bank; Telenor (TEL NO) upgraded at SEB; Bayer (BAYN GY) upgraded at AlphaValue; Norsk Hydro (NHY NO) upgraded at Arctic Securities.

DAY AHEAD:

• GEOPOLITICS: US envoys Steve Witkoff and Jared Kushner are in Doha to discuss US-Iran negotiations with mediators, not Iranian officials; no high-level or direct talks are scheduled in coming days, though technical talks between lower-ranking officials will continue this week, including on nuclear, economic, security and regional issues.
• DATA: In Europe, Eurozone flash June inflation -- headline expected at 0.2% M/M (prev. 0.1%) and 3.0% Y/Y (prev. 3.2%), while the core is seen at 2.6% Y/Y (from 2.6%); S&P Global Manufacturing PMI finals for France (exp. 50.7, prev. 49.7), Germany (exp. 50.0, prev. 50.1), the Eurozone (exp. 51.3, prev. 51.6) and the UK (exp. 53.1, prev. 53.9). In North America, US ADP employment change for June is expected to print 113K (prev. 122K); Challenger job cuts for June are seen at 85K (prev. 97.006K). Revelio Public Labour Statistics are also due. ISM Manufacturing PMI for June is expected to see the headline at 54.0 (prev. 54.0), prices paid at 79.0 (prev. 82.1), new orders at 56.0 (prev. 56.8) and employment at 49.0 (prev. 48.6). US construction spending for May is also due today. After today’s data releases, the Atlanta Fed GDPNow Q2 2026 tracking estimate will be updated (prev. 2.50%).
• CENTRAL BANKS: ECB Sintra forum closes; speakers from the event today include ECB President Lagarde, Fed Chair Warsh, BoE Governor Bailey, and BoC Governor Macklem, who will all participate in a policy panel. Elsewhere, ECB’s Vujcic, Cipollone and Lane (dovish) will chair sessions at Sintra.
• SUPPLY: Germany auctions EUR 3.5bln of 2032 Bunds; UK auctions GBP 1.25bln of 2031 linkers.
• ENERGY: EIA weekly energy inventories due; afterhours on Tuesday, API data reportedly showed headline crude stocks posting a larger than expected draw of -6.1mln bbls (exp. -4.1mln), Cushing stocks building by +0.5mln bbls; in the products, distillates posted a surprise build of +2.9mln bbls (exp. -0.9mln), while gasoline inventories saw a larger than expected draw of -2.1mln bbls (exp. -0.9mln).
• EARNINGS: Notable US corporates reporting today include: General Mills (GIS), FactSet (FDS).