EUROPEAN OPEN: HSBA LN Swiss unit faces French charges; AIR FP May deliveries rise on China aircraft release; Bally’s Intralot agrees GBP 243mln EVK LN deal; Norwegian oil wage deal averts strike action; LULU tumbles after cutting FY view

EUROPEAN OPEN:

• European equities opened mixed; on the week, futures of the Euro Stoxx 50 are primed for small gains, while futures of the broader Stoxx 600 are on course for small downside. Overnight, Asian equities fell as AI sentiment cooled following Broadcom’s disappointing AI chip revenue forecast.
• Japanese officials stepped up verbal intervention as USDJPY hovered near 160, with PM Takaichi stating Japan aims to defend the JPY’s credibility via strengthening the domestic economy, and FinMin Katayama warning authorities will respond in the FX market as needed. The INR strengthened after RBI Governor Malhotra said that uncertainty-driven FX moves are out of sync with India’s fundamentals, and that the central bank will curb excess volatility, with a wide range of instruments available to address disorderly currency movements. The RBI left rates unchanged at 5.25%.
• Brent edged up to around USD 95.50/bbl, after falling on Thursday, as optimism over US-Iran peace talks offset uncertainty surrounding a Lebanon ceasefire. Separately, Oman’s main crude export terminal at Mina Al Fahal delayed loadings following an explosion, adding supply disruption risk at one of the few remaining Middle Eastern loading points outside the Strait of Hormuz; in early European trade, it was announced that the port has recommenced operations.
• Gold declined to beneath USD 4,440/oz, and is on course for a weekly decline of around 2%, as US-Iran peace talks stalled following Hezbollah’s rejection of a US-brokered truce and escalating attacks on Kuwait and Bahrain. Copper, aluminium and zinc fell amid caution before today’s US jobs data. Metals also faced pressure from Middle East uncertainty and weaker technology stocks. Iron ore headed for a fourth weekly loss as weaker seasonal Chinese steel demand, rising global shipments and expectations of more Australian supply pressured prices.
• The highlight today is the US jobs data (preview below), with the consensus expecting 85k nonfarm payrolls, and for the unemployment rate to remain at 4.3%.

STOCK SPECIFICS:

• INDUSTRIALS: Rolls-Royce (RR/ LN) faces criticism from politicians and industry figures after selecting South Korea’s Doosan Enerbility to finalise designs for key components in three UK small nuclear reactors; the decision has raised questions over whether the government’s 70% British-made target will be met, and prompted warnings that the UK may miss a supply-chain opportunity. Airbus (AIR FP) delivered 81 aircraft in May (vs 51 in May 2025), partly due to the release of planes caught in a regulatory stand-off with China, where around 20 aircraft had been held up after China appeared to delay deliveries to pressure European regulators over certification of its C919 jet. Analysts say it is too early to assess whether May’s acceleration is sufficient for Airbus to meet its FY target of 870 deliveries, given ongoing supply chain constraints. Separately, Boeing (BA) is exploring increasing production of its 737 aircraft beyond its 63-jet monthly rate to 70 jets to test the resilience of the supply chains it shares with Airbus.
• ENERGY: Norwegian oil companies have agreed a wage deal with three labour unions, preventing strike action; officials said the agreement includes a general annual pay increase of NOK 42K.
• FINANCIALS: Allianz Global Investors (ALV GY) is in exclusive talks to buy UOB Asset Management in a deal that could be valued at up to SGD 600mln; talks are ongoing, and no final decision has been reached. French prosecutors have brought preliminary charges against the HSBC's (HSBA LN) Swiss division over allegations it helped former Lebanese central bank governor Salameh embezzle funds.
• CONSUMER: Of note for retailers, Lululemon (LULU) shares tumbled over 11% in extended US trading after it cut FY guidance, citing negative brand commentary, underwhelming product launches, continued North American weakness and margin pressure from tariffs and discounting. Major Heineken (HEIA NA) shareholders are reportedly pressing the brewer to appoint an external CEO, departing from its longstanding practice of internal promotions, FT says. Of note for German automakers, an EY analysis suggests that German automakers lost ground to competitors at the start of 2026; specific underperformance was seen in US and China. Bally’s Intralot agreed an all-share acquisition of Evoke (EVK LN) for GBP 243.1mln; the deal represents a 138% premium to Evoke’s closing price on 9th December 2025.
• TECH: Of note for AI names, senior US officials have discussed taking direct equity stakes in major AI companies, following a pitch from OpenAI CEO Sam Altman.
• BROKER UPDATES: Valeo (FR FP) downgraded at ESN; Vestas (VWS DC) upgraded at Kepler Cheuvreux; Belimo (BEAN SW) upgraded at BNP Paribas; Nordnet (SAVE SW) upgraded at Berenberg.

DAY AHEAD:

• DATA: Eurozone Q1 GDP third estimate seen at 0.1% Q/Q (prev. 0.2%) and 0.8% Y/Y (prev. 1.2%), while the final employment change is seen at 0.1% Q/Q (prev. 0.2%) and 0.5% Y/Y (prev. 0.7%). Stateside, US jobs data for May is due, with headline non-farm payrolls seen at 85K (prev. 115K), the unemployment rate remaining at 4.3%, average hourly earnings rising +0.3% M/M (prev. 0.2%) and 3.4% Y/Y (prev. 3.6%); Canada May job figures are also due, with the headline employment change expected at 10K (prev. -17.7K), and unemployment rate remaining at 6.9% (prev. 6.9%). In the afternoon, US consumer credit data will be published.
• CENTRAL BANKS: BoE’s Bailey and BoE’s Dhingra will make remarks today. The Fed will go onto its pre-meeting blackout after today, ahead of its June 16-17th confab.
• CRA: Potential reviews from Fitch Ratings on Hungary (BBB), and Morningstar DBRS on Hungary (BBB).
• ENERGY: Baker Hughes weekly rig counts due (prev. oil 429, total 562).
• PREVIEW - US NONFARM PAYROLLS (13:30BST/08:30EDT): The US economy is expected to add 85k nonfarm payrolls in May, vs 115k added in April. The unemployment rate is seen unchanged at 4.3%. Average hourly earnings are expected to rise 0.3% M/M, while the annual rate is seen easing to 3.4% from 3.6%. ADP’s stronger-than-expected 122k private payrolls print has offered some encouragement, though analysts caution that ADP data tends to deviate from official BLS figures, and that prior pick-ups have proved false signals. Business surveys offer little comfort, with both the ISM manufacturing and services employment sub-indices remaining in contractionary territory. Traders will be watching closely for signs of labour market deterioration, given that FOMC officials view employment risks as tilted to the downside, though Fed officials are seemingly more concerned about the inflation side of its mandate, amid the labour market stability.
• Click here for Newsquawk’s full US jobs data preview.