EUROPEAN OPEN: HLAG GY earnings fall on freight-rate pressure, backs outlook; SIE GY orders beat, sales miss, announces EUR 6bln buyback; ALV GY posts record Q1 operating profit; MRK GY raises guidance after Q1 beat; DTE GY raises guidance

EUROPEAN OPEN: European equities opened higher amid a heavy earnings docket (see below). Overnight, APAC trade was mixed after a soft handover from Wall Street, with sentiment pressured by tech weakness, higher oil prices, firmer-than-expected inflation and lingering geopolitical uncertainty. In geopolitics, Iran reportedly requires five confidence-building conditions before entering a second round of talks with the US, while US and Chinese negotiators began talks in Seoul ahead of this week’s Trump-Xi summit. Trump said trade would be the main focus of his meeting with Xi, while downplaying the attention given to Iran. Oil slipped after rising almost 8% over three sessions as Middle East peace talks remained at an impasse; Brent trades around USD 106.50/bbl. Gold is slightly lower after Tuesday’s decline, as accelerating US inflation lifted expectations for a Fed hike this year; bullion trades around USD 4,700/oz as Europe gets underway. India more than doubled import tariffs on gold and silver to around 15% from 6%, including a 10% basic customs duty and 5% agriculture infrastructure and development levy, to support the INR and FX reserves. Copper extended gains above USD 14k/ton as mine supply risks mounted, with disruptions at Grasberg, Kamoa-Kakula, Cobre Panama and El Teniente, alongside acid shortages threatening leach operations in Chile, the DRC and Zambia. Closer to home, the EU Commission outlined a potential compromise to break the EU-US trade deal deadlock, with reference to the sunrise clause, Politico reported. In UK politics, PM Starmer will meet Health Secretary Streeting ahead of the King’s Speech, after four ministers resigned and more than 80 Labour MPs urged him to quit or set a departure timetable; more than 100 Labour MPs have backed him and opposed a leadership contest. In Germany, Chancellor Merz’s CDU-led bloc and the Social Democrats agreed to press ahead with reforms after a six-hour coalition meeting yielded few concrete agreements. In data, French unemployment unexpectedly rose to 8.1% in Q1 (exp. 7.8%), while German wholesale prices rose 2% M/M in April (exp. 1%), with the annual rate at 6.3% Y/Y (prev. 4.1%).

STOCK SPECIFICS:

• FINANCIALS: Allianz (ALV GY) reported record Q1 operating profit of EUR 4.52bln (exp. 4.4bln), helped by property-casualty insurance and asset management. Pimco attracted EUR 37.6bln from outside clients; Allianz Global Investors recorded EUR 7.6bln in third-party inflows. ABN AMRO (ABN NA) reported Q1 operating income of EUR 2.29bln (exp. 2.29bln), net income of EUR 693mln (exp. 569mln), NII of EUR 1.64bln (exp. 1.59bln) and a CET1 ratio of 15.5% (exp. 15.4%); lowered FY cost guidance to around EUR 5.5bln (from EUR 5.6bln). Zurich Insurance (ZURN SW) reported Q1 P&C gross written premiums of USD 15.6bln (vs 13.3bln Y/Y), and P&C insurance revenue of USD 12.0bln (from USD 10.8bln); premiums grew across divisions, with support from currency movements and contract timing; said it remains on track to meet or exceed FY27 targets.
• INDUSTRIALS: Siemens (SIE GY) Q2 revenue EUR 19.8bln (exp. 20.1bln), orders EUR 24.11bln (exp. 22.6bln), net income -8.3% Y/Y at EUR 2.24bln. It announced a share buyback of up to EUR 6bln over five years; confirmed FY26 guidance; lifted forecasts for Digital Industries and Smart Infrastructure. Hapag-Lloyd (HLAG GY) Q1 revenue USD 4.91bln (vs 5.31bln Y/Y), EBITDA of USD 494mln (from 1.10bln); CEO called the quarter unsatisfactory, citing weather-related supply chain disruptions and freight-rate pressure; backed its 2026 outlook, and sees lower earnings in a difficult market environment. Eiffage (FGR FP) Q1 revenue of EUR 5.7bln (exp. 5.7bln), contracting order book +5% Y/Y at EUR 31.1bln; affirmed its FY26 outlook; announced the acquisition of a majority stake in Hand & Werk to expand in the German data centre market, with closing expected this year. Alstom (ALO FP) FY sales EUR 19.2bln (exp. 19bln), adj. EBIT EUR 1.17bln (exp. 1.17bln), with a 6.1% margin; CEO said market momentum is strong and execution quality is a priority; confirmed its FY26/27 outlook, and ruled out an equity raise. Babcock (BAB LN) FY revenue GBP 5.27bln (exp. 5.12bln), contract backlog GBP 9.6bln, underlying operating profit of GBP 0.29bln (vs 0.36bln Y/Y); affirmed FY27 guidance, supported by about 70% contracted revenue, and remains confident in medium-term guidance, despite a GBP 140mln Type 31 charge.
• UTILITIES: RWE (RWE GY) Q1 adj. EBITDA EUR 1.6bln (exp. 1.66bln), adj. EPS of EUR 0.85 (from 0.68 Y/Y), as stronger offshore wind offset weaker trading; offshore wind adj. EBITDA rose to EUR 570mln (from EUR 380mln); confirmed FY guidance for adj. EBITDA. E.ON (EOAN GY) Q1 adj. EBITDA EUR 3.3bln (exp. 3.17bln), adj. net income of EUR 1.34bln; reaffirmed FY26 guidance for adj. EBITDA and adj. net income, as well as its outlook through 2030.
• MATERIALS: Brenntag (BRN GY) Q1 sales EUR 3.66bln (exp. 3.7bln), operating profit EUR 950mln (vs 1.02bln Y/Y), EPS EUR 0.68 (from 0.93); confirmed its 2026 operating EBITDA outlook; cites pricing measures and cost-cutting support.
• ENERGY: EU energy ministers are discussing a windfall tax on energy firms’ war-linked profits, a minister said; oil and gas companies have recently benefited from higher prices and volatility caused by Iran conflict disruption, prompting renewed calls across Europe for taxes on excess profits to fund consumer support, curb inflation and ease public finances.
• TECH: Samsung Electronics (SSNLF) and its union failed to reach a pay deal, raising the risk of an 18-day strike from 21st May, Reuters reports. The union cites bonus pay gaps with SK Hynix (HXSCL) and demands higher salaries, profit-based bonuses and clearer bonus calculations. South Korea PM Kim Min-seok urged dialogue to prevent a strike; the government also convened an emergency cabinet meeting on the matter.
• COMMUNICATIONS: Deutsche Telekom (DTE GY) slightly raised 2026 guidance after growth in Germany and at T-Mobile US (TMUS); now expects adj. EBITDA after leases to rise 7.5% to around EUR 47.5bln (prev. saw 47.4bln), and sees free cash flow after leases at more than EUR 19.8bln.
• HEALTHCARE: Novo Nordisk (NOVOB DC) presented new sub-analyses from the Phase 3 OASIS 4 trial showing Wegovy pill efficacy in adults with obesity versus placebo; Wegovy pill delivered 21.6% weight loss in early responders and doubled mobility improvement. Merck (MRK GY) Q1 sales EUR 5.13bln (exp. 5.08bln), adj. EBITDA EUR 1.53bln (exp. 1.46bln), adj. EPS of EUR 2.11 (exp. 1.95); raised FY adj. EPS guidance to EUR 7.30-8.20, lifted FY net sales guidance to EUR 20.4-21.4bln and confirmed mid-term guidance. Eli Lilly (LLY) said late-phase trials showed people with obesity maintained long-term weight loss with Foundayo or lower-dose Zepbound after switching from higher-dose injectable incretin therapy. SURMOUNT-MAINTAIN showed Zepbound MTD and 5mg met primary and key secondary endpoints. ATTAIN-MAINTAIN showed switching to Foundayo supported long-term weight maintenance, meeting primary and key secondary endpoints.
• CONSUMER: TUI (TUI1 GY) Q2 revenue EUR 3.7bln (exp. 3.72bln), adj. EBIT loss of EUR 0.19bln; affirmed its FY26 outlook, assuming no material escalation in geopolitical tensions; noted increased consumer caution and later summer bookings, while expecting strong H2 demand in Holiday Experiences and saying it is positioned for current market conditions. Brown-Forman (BF.B) on Monday rejected a roughly USD 15bln cash takeover offer (USD 32/shr) from rival Sazerac, according to sources cited by the WSJ.

DAY AHEAD:

• EVENTS: Kevin Warsh was confirmed by the Senate to a 14-year Federal Reserve Board term on Tuesday in a 51-45 vote, teeing up a Senate vote today on his nomination to lead the Fed for a four-year term. UK King’s speech will outline the government’s policy priorities; PM Starmer will meet Health Secretary Streeting at Downing Street ahead of the speech amid pressure after four ministers resigned and more than 80 Labour MPs urged him to quit or set a timetable to leave.
• DATA: In Europe, Eurozone second estimate of GDP (exp. 0.1% Q/Q, prev. 0.2%; the annual measures are seen at 0.8% Y/Y from 1.2%), employment change preliminary (exp. 0.6% Y/Y, prev. 0.7%; exp. 0.1% Q/Q, prev. 0.2%) and March industrial production (exp. 0.5% M/M, prev. 0.4%). Germany’s March current account (prev. EUR 22bln). In North America, US PPI inflation data is expected to show the headline at 4.9% Y/Y (prev. 4%), rising 0.5% M/M (prev. 0.5%), core PPI is seen rising to 4.3% Y/Y (prev. 3.8%), rising 0.3% M/M in the month (prev. 0.1%); weekly MBA mortgage applications are also scheduled.
• CENTRAL BANKS: ECB Economic Bulletin articles on labour force drivers and older worker employment trends released. Riksbank and BoC meeting minutes are also due.
• SPEAKERS: ECB President Lagarde (neutral) will speak at an awards ceremony; ECB chief economist Lane (dovish) will give remarks at a dinner organised by Centre for European Reform in London (text and slides will be released); ECB’s Buch (supervisory) will give a lecture in Germany. BoE’s Mann (hawk) will speak on UK international exposures and vulnerabilities (text is due). Fed’s Collins (2028 voter, neutral) will speak on the economic outlook; Fed’s Kashari (2026 voter, hawk) will participate in a moderated discussion. Fed’s Logan (2026, hawk) will also participate in a moderated discussion.
• SUPPLY: Italy auctions EUR 6.25-7.5bln of 2029, 2033 and 2038 BTPs; Germany sells EUR 1.5bln of 2054 and EUR 1bln 2047 debt; US will sell USD 25bln of 30yr bonds.
• ENERGY: DoE weekly energy inventories data are due; afterhours on Tuesday, API weekly inventory data reportedly showed headline crude posted a draw of -2.2mln bbls (exp. -2.3mln), Cushing stocks drew down by -1.8mln bbls, distillates drew down by a smaller than expected -0.3mln bbls (exp. -1.3mln), and gasoline saw a surprise build of +0.5mln bbls (exp. -2.5mln). IEA Oil Market Report and OPEC Monthly Oil Market Report published.
• EARNINGS: Notable corporates reporting today include: Cisco Systems (CSCO) and Alibaba (BABA).