EUROPEAN OPEN: EZJ LN agrees in principle to revised GBP 6.90/shr Castlelake offer; CON GY sells ContiTech for EUR 4bln; NXT LN prepares Harvey Nichols bid; P911 GY mulls 4,000 job cuts; Sky agrees GBP 1.6bln ITV LN unit deal; HO FP plans EXA FP deal

EUROPEAN OPEN:

European equities start the week mixed, but not too far off neutral. Overnight, APAC stocks initially gained, before paring; Asian tech stocks and the tech-heavy KOSPI weakened as caution grew over the AI rally’s durability, and ahead of Samsung’s prelim numbers due on Tuesday, and this week’s USD 29bln US stock-market listing for SK Hynix, which may become the largest first-time share sale by a foreign company.
Brent trades slightly above USD 72/bbl and WTI near USD 69/bbl, as Hormuz flows persisted, while OPEC+ announced it would add 188K BPD to August output quotas, adding to three consecutive monthly increases, and bringing total quota increases since the war began to 940K BPD.
USDJPY has risen back above 162; Goldman Sachs revised up its forecast to 165 in a year’s time (from 155), citing Japanese fiscal pressures and higher-for-longer US Treasury yields, as it only expects gradual BoJ rate hikes. GS also favours the yen as a carry trade funding currency.
Gold starts the week softer, but has steadied around USD 4,165/oz after last week seeing its first weekly gain since May, supported by fading Fed rate hike expectations following the soft US jobs data, and lower energy prices.
Iron ore futures rose before paring gains, after China last week expanded curbs on Fortescue, asking domestic steel mills and traders not to purchase new USD-denominated cargoes of its Super Special Fines product.
Copper rose for a third consecutive session and aluminium extended a rebound from a four-month low, supported by fading Fed rate hike bets after Fed Chair Warsh last week said price risks were easing. Chinese funds also shifted into metal stocks and futures ahead of anticipated solid H1 earnings from producers, Bloomberg notes.
In trade news, Chinese Foreign Minister Wang Yi said China welcomes deeper cooperation with Swedish and European businesses, adding that China would continue to boost domestic demand, advance high-level opening-up and uphold free-trade principles.
Germany reportedly plans to increase net new borrowing for 2027 to EUR 118bln, approximately 7% above the April projection, reflecting weaker-than-expected tax revenue, rising debt-servicing costs and additional funding needs at the Federal Employment Agency, Bloomberg reports. Federal revenue is forecast at EUR 555bln, with interest payments projected to rise nearly 40% to just under EUR 42bln. Defence spending of EUR 140bln and a EUR 500bln infrastructure programme remain outside constitutional borrowing limits.
In data releases, German factory orders rose by +1.9% M/M in May (exp. 1.2%, prev. -3.8%). The rebound was partly attributed to rechannelling of international orders following Middle East disruption, with some manufacturers benefiting from Asian competitors’ greater exposure to Strait of Hormuz trade route disruptions. ING noted order books are recovering only gradually, averaging roughly 1% monthly growth in 2026, but said the data fuels hopes of at least a gradual recovery in German industry.
In UK politics, the likely next PM, Andy Burnham, announced that he will keep the pension triple lock. Elsewhere, a group of economists, including Burnham adviser Jim O’Neill, have called for a wide-ranging UK tax overhaul, urging the next government to consider scrapping stamp duty and council tax.
Today’s docket features Eurozone PPI and retail sales, as well as the ISM Services gauge from the US. This week, traders will eye minutes from the June FOMC meeting, with traders seeking insight into the committee’s hawkish shift under new boss Kevin Warsh, and any change in forward guidance tone. USD 119bln in Treasury auctions headline an otherwise light week for data, with a 3yr note sale on Tuesday, 10yr on Wednesday, and 30yr on Thursday. ECB meeting minutes are also due this week.

STOCK SPECIFICS:

CONSUMER: Continental (CON GY) agreed to sell its ContiTech plastics and rubber business to Lone Star Funds for EUR 4bln, plus potential performance-based components of up to EUR 250mln in subsequent years; Continental expects cash proceeds of about EUR 3.1bln, and plans to distribute around EUR 2.5bln to shareholders after completion. Next (NXT LN) is preparing to launch a takeover bid for luxury department store Harvey Nichols, though plans remain at an early stage, Sky News reports. Porsche (P911 GY) is reportedly considering cutting more than 4,000 jobs, with particular focus on management and administration roles, DPA reports.
COMMUNICATIONS: Comcast’s (CMCSA) Sky agreed to acquire ITV’s (ITV LN) media and entertainment arm for GBP 1.6bln, subject to shareholder and regulatory approval, in a deal that would create the UK’s largest commercial broadcaster. The transaction includes the ITVX streaming platform and ITV’s free-to-air channels but excludes ITV’s studio operations.
INDUSTRIALS: EasyJet (EZJ LN) agreed in principle to Castlelake’s fifth takeover bid, at GBP 6.90/shr in cash, valuing the airline at GBP 5.2bln (GBP 5.5bln fully diluted); Brookfield Asset Management (BAM) is part of the bidding group, alongside former EasyJet executive Peter Bellew. Thales (HO FP) plans to acquire Exail Technologies (EXA FP) for EUR 134/shr, and will record an exceptional, mostly non-cash charge of approximately EUR 450mln in H1 2026 following termination of the F126 programme, impacting net income by approximately EUR 350mln (no impact seen on adj. EBIT or adj. net income). FY 2026 guidance is upgraded, now sees organic sales growth of 6-7%.
HEALTHCARE: Novartis (NOVN SW) has agreed to acquire Myricx Bio, advancing next-generation antibody-drug conjugate innovation with a novel NMTi payload, expanding options for cancer patients.
TECH: Uber Technologies (UBER) has paused planned food delivery expansion in five of seven targeted European countries (including Austria, Norway and Greece), five months after announcing a push targeting USD 1bln in additional gross bookings over three years, FT reports. The company continues pursuing its EUR 10bln bid for Delivery Hero (DHER GY), which was rejected in May, with Prosus (PRX NA) considering expanding its stake in a move that could complicate the acquisition.
NOTABLE BROKER UPDATES: Antofagasta (ANTO LN) upgraded at JPMorgan; GSK (GSK LN) upgraded to Hold from Reduce at HSBC; Societe Generale (GLE FP) upgraded at Kepler Cheuvreux. Merck (MRK GY) downgraded at HSBC; Roche (ROG SW) downgraded at HSBC; Continental (CON GY) downgraded at Kepler Cheuvreux; Close Brothers (CBG LN) downgraded at RBC; SES (SESG FP) downgraded at Barclays.

DAY AHEAD:

DATA: In Europe, Eurozone PPI is expected to rise 0.2% M/M (prev. 0.6%), and the annual rate is seen rising to 5.7% Y/Y from 4.9%. Eurozone retail sales are seen declining by -0.6% M/M in May (prev. -0.4%), with the annual rate seen cooling exp. 0.8% Y/Y (prev. 1.0%). Construction PMI data for June will also be released across the bloc. In North America, the headline ISM Services PMI for June is expected to pare to 54.0 from 54.5), prices paid at 69.0 (prev. 71.3), new orders at 57.0 (prev. 57.3).
CENTRAL BANKS: Fed’s Waller will take part on a policy panel. ECB’s Lane gives a dinner speech (text release expected), ECB’s Schnabel participates on a policy panel, ECB’s President Lagarde will participate in a conversation (no text expected). BoE’s Mann will speak on the future of UK economic data. Bank of Israel interest rate decision is likely to cut rates 25bps to 3.50%; BoC’s Business Outlook Survey for July published.
WEEK AHEAD: This week’s economic data release highlights include: FOMC minutes, ECB minutes, Chinese inflation figures, and an RBNZ policy announcement. The corporate earnings slate is light, but includes PEP & DAL.
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