EUROPEAN OPEN: HSBA LN profit misses as credit losses rise; UCG IM record profit, upgrades FY26 ambitions; RHM GY Q1 miss; BOSS GY EBIT tops as revenue falls; Judge questions BAYN GY Roundup settlement; ABI BB Q1 beat on volume growth

• EUROPEAN OPEN: European equities started the session mixed, following a soft lead overnight; US stocks traded risk-off on Monday, as escalating tensions in the Strait of Hormuz and the UAE drove energy prices sharply higher, weighing on equities and bonds while supporting the USD. APAC stocks fell on the weak Wall Street lead, with liquidity thin amid holidays in Japan, South Korea and Mainland China, while MSCI’s Asia Pacific Index pared from Monday’s record close. The US and Iran exchanged fire, escalating Middle East tensions, further fuelling inflation concerns. President Trump said the Iran conflict could last another 2-3 weeks, that a workaround shipping route was functioning well, and that oil prices should fall sharply once hostilities end. He said Iran fired on vessels from uninvolved nations, including a South Korean cargo ship, during Project Freedom movements, and warned Iran would be destroyed if it attacked US vessels carrying out the operation. Crucially, however, Trump stopped short of saying Iran had violated the ceasefire. Despite the geopolitical tensions, crude edged lower, with July Brent starting the European day around USD 113.50/bbl after surging above USD 115/bbl on Monday; some attributed the move to Trump’s ceasefire remarks, while others pointed to a technical correction after WTI and Brent settled markedly higher. ANZ analysts said declines were likely to be limited given pressure on the US-Iran ceasefire. Gold rose towards USD 4,550/oz after Monday’s declines, as dip buyers entered; State Street analysts said gold could rise while consensus and Fed guidance points to future easing; it said that a sustained hawkish turn could be a temporary headwind, while oil at USD 100/bbl could cap momentum towards USD 5,000/oz. NY Fed’s Williams on Monday said policy is well-positioned, but rates may need to fall ahead if inflation returns to 2%; he added higher-than-expected inflation this year pushes back rate-cut timing, without changing the broader outlook. In APAC, the RBA voted 8-1 to hike +25bps to 4.35%, its third straight rise, unwinding all of last year’s easing; one official called for rates to be left unchanged. In Europe, EU Economy Commissioner Dombrovskis warned the Iran war is creating a stagflationary shock, pushing the bloc towards weaker growth and higher inflation. Ahead, EU Trade Commissioner Sefcovic meets USTR Greer in Paris after Trump threatened higher EU car and truck tariffs. Data includes US final building permits, new home sales, US/Canadian trade, ISM services, JOLTS and RCM/TIPP optimism.

STOCK SPECIFICS:

• COMMUNICATIONS: CK Hutchison (CKHUY) agreed to sell its 49% stake in VodafoneThree, the UK’s largest mobile operator, in a GBP 4.3bln buy-out deal, Bloomberg reports. VodafoneThree, jointly owned by CK Hutchison and Vodafone (VOD LN), will pay CK Hutchison in cash for cancellation of the stake.
• TECH: Palantir (PLTR) shares fell 2.3% in afterhours trading, despite stronger results and lifted guidance, as US commercial revenue fell short of expectations, and the stock remained under pressure from wider concerns about AI disruption in software, while some profit taking was cited after the rally since April. ON Semiconductor’s (ON) shares fell 4.5% in extended trading after only narrowly beating expectations, despite solid guidance, as investors’ expectations had risen following the stock’s strong advance.
• FINANCIALS: UniCredit (UCG IM) posted a record quarterly profit, upgraded its FY26 net profit ambitions to equal to or above EUR 11bln, and reaffirmed its FY28 and FY30 net profit ambitions despite a more challenging macro backdrop. HSBC (HSBA LN) Q1 pretax profit missed estimates on wider than expected credit losses; pretax was slightly lower Y/Y as expected credit losses rose by USD 400mln (to USD 1.3bln), driven by an unexpected fraud-linked loss tied to secondary securitisation exposure with a UK financial sponsor, alongside pressure from the US-Israel war with Iran, and a weaker economic outlook. It revised FY26 credit charge expectations to 45bps of average gross loans (from 40bps), citing ongoing uncertainty in the outlook.
• HEALTHCARE: A federal judge overseeing cancer lawsuits against Bayer (BAYN GY) and Roundup said he had “grave concerns” about a proposed USD 7.25bln Missouri class-action settlement; the judge questioned whether the Missouri accord would be legally binding on plaintiffs elsewhere, including former Roundup users who have not developed cancer. Fresenius Medical (FME GY) reported Q1 adj. net income of EUR 251mln (exp. 256mln); profit and revenue missed expectations as persistently weak treatment growth in the US weighed on performance.
• INDUSTRIALS: Rheinmetall (RHM GY) prelim Q1 revenue missed expectations; revenue +7.7% Y/Y to EUR 1.94bln (exp. 2.3bln); analysts said investors were now more focused on Rheinmetall’s execution; its full Q1 results are due on Thursday. Fraport (FRA GY) Q1 EBITDA +10.4% to EUR 196mln (exp. 192.83mln); the airport operator said increased traffic to other regions, notably Asia, offset fewer flights to the Middle East. Maersk (MAERSKB DC) vessel Alliance Fairfax transited the Strait of Hormuz on Monday with assistance from the US military, the company said, part of a group of US-flagged commercial ships escorted through the waterway.
• CONSUMER: AB InBev (ABI BB) topped volume growth expectations, driven by diversification beyond beer, and maintained its medium-term EBITDA growth outlook. Organic revenue +5.8% (exp. 3.2%), supported by organic volume growth of 0.8% (exp. -0.3%), as non-beer growth helped volumes beat expectations. Backed its medium-term outlook for EBITDA growth between 4-8%. Hugo Boss (BOSS GY) Q1 EBIT EUR 35mln (exp. 30mln), revenue was EUR 905mln (exp. 887mln); CEO said the market became more challenging in Q1 due to Middle East developments; confirmed its FY26 guidance. LVMH (MC FP) is reportedly exploring the sale of fashion, beauty and drinks assets, and the disposals could raise billions of euros, and add to recent asset sales, marking one of the group’s most significant strategic retrenchments in decades amid softer luxury demand, FT reports.

DAY AHEAD:

• EVENTS: EU Trade Commissioner Sefcovic will meet USTR Greer in Paris; the talks come after President Trump threatened to raise tariffs on EU cars and trucks to 25% (from 15%), citing frustration over delays implementing last July’s trade agreement.
• DATA: In North America, ISM Services PMI is seen easing to 53.7 (from 54.0), business activity is seen falling to 53.5 (prev. 53.9), employment is expected to ease to 45 (prev. 45.2), prices are seen rising to 71 (prev. 70.7), and new orders are seen at 60 (prev. 60.6). JOLTs job openings are expected at 6.87mln (prev. 6.882mln), with attention on the quits rate (prev. 1.9%). The US trade deficit is seen widening to USD 59bln from 57.3bln. Canada trade data is also due. The RCM/TIPP economic optimism index is seen paring to 42 (from 42.8). The Atlanta Fed will update its GDPNow tracking estimate (currently tracks growth of 3.5% in Q2).
• CENTRAL BANKS: The BoE publishes its Q1 2026 Asset Purchase Facility Quarterly Report. BCB Copom meeting minutes are released.
• SPEAKERS: ECB’s Lagarde (neutral) and ECB’s Lane (neutral) both speak at a climate conference (text releases are expected for both). Fed’s Bowman (voter, dovish) speaks at the Women in Housing and Finance Symposium; Fed’s Barr (voter, neutral) speaks on banking regulation.
• SUPPLY: Germany sells EUR 1.0bln of 2029 and EUR 0.5bln of 2035 Green Bunds.
• ENERGY: After the close, the API publishes its gauge of weekly energy inventories.
• EARNINGS: Notable corporate results due today include: Advanced Micro Devices (AMD), Arista Networks (ANET), Eaton (ETN), Duke Energy (DUK), Pfizer (PFE), Shopify (SHOP), KKR & Co (KKR), Cummins (CMI), Emerson Electric (EMR), American Electric Power (AEP), Marathon Petroleum (MPC), TransDigm (TDG), Occidental (OXY), Lumentum (LITE), Strategy (MSTR), Corteva (CTVA), Electronic Arts (EA), IDEXX Laboratories (IDXX), PayPal (PYPL), Rockwell (ROK), WEC Energy (WEC), Public Service Enterprise (PEG), Fiserv (FISV), Live Nation (LYV), Archer-Daniels-Midland (ADM), Prudential (PRU), IQV (IQV), Devon Energy (DVN), IQVIA Holdings (IQV), DuPont (DD), International Flavors & Fragrances (IFF), Super Micro Computer (SMCI).