EUROPEAN OPEN: HSBA LN reviews Singapore business; WS to acquire KCO GY in USD 2.4bln deal; EQNR NO allowed to resume NY Empire Wind project; BMPS IM chief’s job under threat amid clash with shareholder; CFR SW downgraded, ROG SW upgraded

• EUROPEAN OPEN: European equities have opened slightly lower; on the week, futures of the narrow Euro Stoxx 50 are on course for a third week of gains, while futures of the broader Stoxx 600 are set for a fifth week of upside. Overnight, APAC stocks were mostly higher, supported by strength in the tech sector after strong TSMC earnings lifted sentiment across the region. Metals prices fell after China ordered exchanges, including the Shanghai Futures Exchange, to remove high-frequency trading servers, cooling sentiment following frenetic mainland futures activity. Copper, zinc and aluminium declined. Silver continued its decline, having fallen recently as the US paused import tariffs on critical minerals, but remained up more than 13% for the week amid strong precious metals demand. Gold edged lower overnight as easing geopolitical risks reduced safe-haven demand, after US officials said Trump was advised a large-scale strike on Iran was unlikely, with investors locking in profits. Crude steadied after its biggest drop since June as the US signalled it would hold off on attacking Iran. Brent is trading near USD 64/bbl, while WTI is beneath USD 60/bbl, easing concerns over supply disruptions. In trade news, the US and Taiwan agreed a trade deal cutting tariffs on Taiwanese goods to 15% from 20%, and securing increased investment by Taiwanese semiconductor firms in US operations of USD 500bln. The reduced tariff rate will not be added to existing most-favoured-nation duties. Traders will today be watching events in France; PM Lecornu’s office said opposition from far-left and far-right parties has made it impossible to pass a 2026 budget via a parliamentary vote, requiring the government to use an alternative mechanism; the administration will propose amendments to the original budget draft today.
• STOCK SPECIFICS: In financials, HSBC (HSBA LN) has begun a strategic review of its insurance business in Singapore as part of its global simplification, and will consider all options for the insurance manufacturing business, though final decisions have yet been made, according to Bloomberg. Billionaire Francesco Gaetano Caltagirone has clashed with Monte dei Paschi (BMPS IM) CEO Luigi Lovaglio over plans to merge with Mediobanca (MB IM), centring on control of Mediobanca’s 13% Generali (G IM) stake; the rift threatens Lovaglio’s position, FT says. In materials, Worthington Steel (WS) agreed to acquire Kloeckner & Co (KCO GY), valuing it at USD 2.4bln, offering EUR 11/shr; the transaction is being financed with cash and debt, and targets USD 150mln of synergies by FY28; the deal is seen closing in the H2 2026. In energy, a US federal judge allowed Equinor (EQNR NO) to resume New York’s Empire Wind project, halted in December by President Trump’s administration; the ruling follows a similar decision for Orsted. In industrials, Alstom (ALO FP) will provide New Subway Train fleet for Toronto’s subway, with the agreement valued at EUR 1.4bln. J.B. Hunt (JBHT) shares fell 4.5% in extended US trading after Q4 results beat estimates, though revenue declined, including Intermodal and Final Mile revenue, and it said the freight market “feels fragile” entering 2026 as capacity exits truckload. Of note for UK defence stocks, the UK will reportedly open a business centre in Kyiv this year to help defence startups export more military hardware to Ukraine, which will support SMEs with premises and export challenges linked to security, travel and insurance. Of note for automakers with US exposure, USTR Greer, Transport Secretary Duffy, and EPA Administrator Zeldin will visit Ford (F) and Stellantis (STLA) facilities in Ohio to promote domestic manufacturing and affordability, before attending the Detroit Auto Show as part of a two-day tour. In notable broker updates, Richemont (CFR SW) was downgraded at BofA; Novo Nordisk (NOVOB DC) was reiterated with Neutral at BofA, which raised its price target to DKK 400/shr (from 340/shr); Roche (ROG SW) was upgraded at Goldman Sachs; Boliden (BOL SS) was downgraded at SEB; Swiss Re (SREN SW) was downgraded at Keefe Bruyette.

TODAY'S AGENDA:

• DAY AHEAD: In Europe, French PM Lecornu’s office said opposition from far-left and far-right parties has made it impossible to pass a 2026 budget via a parliamentary vote, requiring the government to use an alternative mechanism; the administration will propose amendments to the original budget draft today. Today's data slate includes US industrial production for December (seen +0.1% M/M following +0.2% prior) and manufacturing output (exp. -0.2%, prev. 0.0%)January's NAHB housing index (exp. 40 vs prev. 39). In the afternoon, Baker Hughes will publish its weekly rig count data. Today's Fed speakers includes: Fed's Jefferson (voter, neutral; text and Q&A expected), Fed's Bowman (voter, dove; text and Q&A expected), and Fed's Collins (2028 voter, hawk; text expected). Elsewhere, remarks are due from BoE Governor Bailey, and Riksbank's Thedeen. Today's corporate earnings docket includes: STT, MTB, RF, CFG, PNC.