EUROPEAN OPEN: FRES LN record 2025;BEI GY sees lower FY EBIT; HO FP sees defence spending supporting sales; NOVOB DC upgraded at MS; US energy announcement, EZ inflation, UK Spring Statement ahead

• EUROPEAN OPEN: European equities have started on the back foot; overnight, Asian stocks fell as Middle East tensions boosted risk-off sentiment; South Korean equities led losses after reopening from a holiday, and briefly triggered a sell-order halt for programme trading. Oil extended gains as the US and Israel intensified action against Iran, which threatened to close the Strait of Hormuz and struck the American embassy in Riyadh with drones. Brent trades just below USD 80/bbl after a c.7% jump on Monday. Aluminium edged higher amid increasing risks of supply disruptions; analysts said a prolonged conflict could affect aluminium smelters in the UAE and Saudi Arabia, potentially limiting access to raw materials and constraining metal exports from the region. ING notes that around 8% of global aluminium production is concentrated in the Gulf, and is heavily reliant on shipping through the Strait of Hormuz. Gold is trading slightly lower, around USD 5,300/oz, with sell-side desks suggesting some profit taking after strong gains in the prior session; ahead however, BMI said that gold may rise above USD 5,600/oz this week absent Middle East de-escalation, and could reach USD 5,850-6,500 if conflict lasts 2-3 weeks. In data, the UK BRC reported that shop price inflation eased to 1.1% in February (exp. 1.4%, prev. 1.5%); non-food prices fell 0.1% after rising 0.3% previously, while food inflation slowed to 3.5% (from 3.9%). The BRC said competitive promotions and lower global food costs helped moderate price pressures. Today, focus will be on the continuing geopolitics in the Middle East; Secretary of State Rubio said the administration will begin measures on Tuesday to mitigate disruption to crude and LNG flows from the Mideast Gulf, but is not considering a SPR drawdown. The UK’s Spring Statement is expected to be a low-key affair, with Chancellor Reeves outlining updated OBR forecasts; no major tax changes are expected, though minor measures remain possible; Eurozone prelim core and headline inflation are expected to be unchanged Y/Y.
• STOCK SPECIFICS: In tech, US officials are considering capping the number of AI accelerators Nvidia (NVDA) can export to any single Chinese customer, potentially limiting sales to 75k H200 chips per company, according to Bloomberg; shipments of AMD’s (AMD) MI325 chips would also count toward the cap. In materials, Fresnillo (FRES LN) reported record 2025 results, with revenue +27.6% to USD 4.65bln and EBITDA rising 80.7% to USD 2.80bln (vs 1.54bln Y/Y), driven by higher precious metal prices and cost control despite lower output; profit increased to USD 1.57bln, net cash stood at USD 1.92bln; declared a USD 950mln dividend, above its usual payout policy. In industrials, Thales (HO FP) said higher European defence budgets are expected to support sales growth this year and beyond; it reported Q4 revenue of EUR 6.88bln (exp. 6.61bln), with record orders in its defence division; sees 2026 sales between 23.3-23.6bln (exp. 23.64bln), and 2026 EBIT Margin 12.6-12.8% (exp. 12.8%). In utilities, four Danish right-wing parties reportedly want the government to prepare an exit plan for its stake in Orsted (ORSTED DC) following the March elections. In consumer sectors, Volkswagen’s (VOW3 GY) Audi unit receives a cautious mention in Bloomberg, which writes that its China rebranding has so far failed to deliver a meaningful turnaround in sales. Beiersdorf (BEI GY) will launch a share buyback of up to EUR 750mln over two years, and expects 2026 EBIT margin to be slightly below 2025 levels, citing higher raw material costs and FX headwinds; sees 2026 organic sales flat to slightly up. In healthcare, Eli Lilly (LLY) CFO said that its Orforglipron pill could potentially come to the US market as early as Q2 following expected approval in April. In notable broker updates, Novo Nordisk (NOVOB DC) was upgraded at Morgan Stanley; Assa Abloy (ASSAB SS) upgraded at Barclays; Barry Callebaut (BARN SW) was upgraded at Morgan Stanley; Lindt (LISN SW) was downgraded at Morgan Stanley; Stellantis (STLAM IM/ STLAP FP) was downgraded at Freedom Capital; Centrica (CNA LN) was downgraded at Morgan Stanley; Drax (DRX LN) was downgraded at Morgan Stanley; St James’ Place (STJ LN) was downgraded at Barclays; Beazeley (BEZ LN) downgraded at Berenberg.

TODAY’S AGENDA:

• DAY AHEAD: In energy, Secretary of State Rubio said the administration will begin measures on Tuesday to mitigate disruption to crude and LNG flows from the Mideast Gulf, but is not considering a SPR drawdown. Afterhours, the API will report its weekly gauge of energy inventories. In Europe, the highlight is the flash inflation data for February, where the core rate of inflation is seen unchanged at 2.2% Y/Y, while the headline rate is expected to be unchanged at 1.7% Y/Y. The UK’s Spring Statement is expected to be a low-key affair, with Chancellor Reeves outlining updated OBR forecasts; no major tax changes are expected, though minor measures remain possible. Stateside, the US RCM/TIPP economic optimism index for March is due. On today’s speakers’ slate: Fed’s Williams (voter; neutral; text and Q&A are expected) and Fed’s Kashkari (2026 voter; neutral; no text expected, Q&A is expected). Notable corporate earnings due today include: CrowdStrike (CRWD), Ross Stores (ROST), AutoZone (AZO), Target (TGT). On the supply slate, Netherlands will sell EUR 6-7bln of 2036 DSLs via DDA; Germany will sell EUR 5.0bln of 2031 Bobls.