EUROPEAN OPEN: HSBA LN targets 17% RoTE through 2028; UK govt denies supermarket price freeze plans; LDO IM wins EUR 320mln Kuwait Navy contract; STLAM IM to announce Dongfeng EV JV; SSNLF-union talks to continue

EUROPEAN OPEN:

• European equities opened lower, following a soft overnight APAC session and weak handover from Wall Street, with sentiment pressured by higher yields and geopolitical uncertainty. Indonesian stocks fell after Jakarta announced plans to tighten commodity export oversight, raising concerns over greater state control and weaker profitability.
• Long-end global bond yields rose overnight to their highest since July 2008 as higher oil prices lifted inflation concerns, with US 30yr yields reaching 5.20%. Bloomberg noted that a large block sale in US Treasury futures, equivalent to roughly USD 15bln of 10yr notes, exacerbated Tuesday’s bond selloff as war-driven energy prices stoked inflation fears. As Europe enters, Treasury yields were edging lower as oil eased and a fragile Middle East ceasefire held, though bond markets remained vulnerable after Tuesday’s global selloff. China’s 10yr government bond yield fell to a nine-month low as weak economic recovery and ample liquidity supported bonds despite the global debt selloff. The US-China 10yr yield gap widened to almost 300bps, which some analysts said could pressure the yuan. Japan’s longer-dated government bonds gained after firm demand at a 20yr auction; Pimco said Japan’s yield curve is “too steep” and sees value in 30yr JGBs, while bearish on 10yr notes, expecting the spread to narrow.
• Brent traded below USD 111/bbl as traders weighed President Trump’s latest Iran threats. Trump said on Tuesday that the war could end “very quickly”, but warned the US may deliver “another big hit” if Tehran rejects peace terms. Reports noted that put options equivalent to 134mln bbls of Brent traded in a single USD 91-90 put spread on Tuesday, with a buyer standing to profit up to USD 129mln if July futures fall roughly 19% by 26th May expiration. The report said the trade rattled markets already unsettled by a DoJ probe into suspicious oil trades made ahead of Trump proclamations.
• Gold traded steady around USD 4,475/oz, though analysts said the lack of progress on reopening the Strait of Hormuz was keeping inflation concerns elevated and increasing bets on global central bank rate hikes, which could weigh on bullion.
• On today’s radar, the data slate is thin but includes Eurozone April final inflation and FOMC meeting minutes. French President Macron’s nominee to lead the Bank of France, Emmanuel Moulin, also faces questioning by lawmakers, who could potentially block the appointment. Earnings from tech giant Nvidia (NVDA) are due after the close.
• DATA: UK CPI eased to 2.8% Y/Y in April (exp. 3%, prev. 3.3%), with services inflation easing to 3.2% Y/Y (from 4.5%). Core CPI eased to 2.5% Y/Y (exp. 2.6%, prev. 3.1%). The ONS said the fall was led by lower electricity and gas prices following the government’s energy bill support package and lower pre-conflict global wholesale energy prices feeding through to a reduced Ofgem cap; smaller rises in water, sewage and Vehicle Excise Duty bills, alongside lower food and package holiday prices, also weighed, though were partially offset by higher petrol and diesel prices and rising clothing and footwear costs. Analysts at Pantheon Macroeconomics said the data was flattered by temporary factors, and expects the BoE to skip June, but still sees a July rate hike as likely, with inflation set to reaccelerate ahead.

STOCK SPECIFICS:

• CONSUMER: An investigation alleges that Nestle (NESN SW) delayed alerting European authorities after finding cereulide in its baby formula; a Nestle spokesperson said the report contained “inaccurate and misleading information.” Stellantis (STLAM IM) is expected to announce a joint venture with Dongfeng to build at least one fully electric Voyah-branded vehicle at a Stellantis factory in France. Marks & Spencer (MKS LN) reported FY25/26 sales of GBP 17.37bln (prev. 13.91bln), adj. EPS of 23.8p (prev. 31.9p), FY dividend +17% at 4.2p; it said the year was one of two halves, with the first significantly impacted by a cyber incident before a return to growth in the second; sees FY26/27 capex of GBP 650-750mln, and expects profit growth to resume vs FY24/25 levels. Of note for UK supermarkets, UK Exchequer Secretary denied reports that the government is considering supermarket price freezes, after Bloomberg reported that Chancellor Reeves had privately proposed voluntary food price freezes, with the Treasury offering regulatory relief in return. Of note for UK housing stocks, FT notes that the combined market value of the UK’s six largest listed housebuilders has fallen by more than GBP 8bln since the Iran war began in February, as investors cite higher interest rates and rising construction costs.
• TECH: Reports state Samsung Electronics’ (005930 KS/SSNLF) largest union will begin an 18-day strike on 21st May after wage talks collapsed over performance bonuses tied to the semiconductor business; around 48K workers are set to walk out. Talks are still scheduled for 08:00BST, with the South Korean Labour Ministry set to mediate. Analysts have warned that a full strike could cut global DRAM supply by 3-4% and NAND by 2-3%, and estimate potential losses to South Korea’s economy of up to KRW 100tln. Logitech (LOGN SW) board has proposed a FY2026 cash dividend of CHF 1.36 per share (prev. 1.26), subject to shareholder approval. Keysight (KEYS) shares rose in extended trading after Q2 beat-and-raise, while it noted record orders, revenue, earnings and free cash flow supporting a stronger outlook.
• FINANICALS: HSBC (HSBA LN) guided for a return on tangible equity of 17% or better and a 50% EPS dividend payout for 2026-28, saying it remains on track to reach USD 1.8bln of cost reallocations; the bank expects to complete its USD 1.5bln simplification savings programme by H1 2026, six months ahead of schedule. Eurazeo (RF FP) has signed an agreement to acquire a majority stake in Nextron Systems, and has raised EUR 1bln at the first close of its smaller deals fund. Euronext (ENX FP) Q1 adj. operating profit +18% Y/Y at EUR 321.7mln, net income +17% to EUR 192.3mln; equity markets revenue +28% to EUR 138.9mln, FICC revenue +5.3% to EUR 95.5mln, primary markets revenue +13% to EUR 52.3mln, with capital markets and data solutions +18% to EUR 185.9mln.
• INDUSTRIALS: Leonardo (LDO IM) has signed a naval combat systems contract for Kuwait Navy's Al Dorra programme, valued at approximately EUR 320mln. Experian (EXPN LN) FY26 revenue of USD 8.45bln (exp. 8.41bln), EPS rose +15%, and it launched a USD 1bln share buyback; sees FY27, total revenue growth of 8-11%, organic revenue growth of 6-8%, and double-digit benchmark EPS growth.
• MATERIALS: Celanese (CE) will raise prices for a range of engineered materials products from 1st June, citing market developments and global supply chain disruptions.

DAY AHEAD:

• DATA: In Europe, Eurozone April final inflation is seen at 3.0% Y/Y (from the previous 2.6%), and core at 2.2% Y/Y (from 2.3%). Stateside, the data slate is thin, but includes weekly MBA mortgage applications.
• CENTRAL BANKS: FOMC April minutes are due for release (see below for preview).
• PREVIEW - FOMC MINUTES (19:00BST/14:00EDT): FOMC minutes will be scrutinised for the scale of support behind dropping the easing bias after April’s hawkish split, with three voters dissenting against retaining it (Kashkari, Hammack, Logan) and non-voter Collins later suggesting she would have supported removal. Markets will watch discussions on inflation risks, labour market resilience and conditions that could push the Fed towards hikes, particularly after Chair Powell said more officials now see a hike as likely as a cut. The statement already shifted inflation language to “elevated”, citing higher global energy prices, while growth and labour market wording stayed broadly unchanged. Since the meeting, energy prices have risen further and markets no longer price cuts this year, instead discounting around a c.60% chance of a year-end hike. The minutes pre-date the latest hot CPI and PPI reports. Traders will also focus on any balance sheet debate, with incoming Chair Warsh favouring lower rates but also tighter balance sheet policy, potentially putting him at odds with a Committee showing limited appetite for near-term easing. Click here for Newsquawk’s full FOMC minutes preview.
• SPEAKERS: Fed’s Barr (voter, neutral) speaks on consumer financial health metrics. BoE’s Bailey (neutral), Breeden (dovish), Dhingra (dove) and Mann (hawk) at Treasury Select Committee. Riksbank’s Jansson speaks on the economic situation and monetary policy. Emmanuel Moulin, President Macron’s nominee to lead the Bank of France, faces Senate and National Assembly questioning today.
• SUPPLY: US sells USD 16bln of 20yr bonds. Germany auctions EUR 5bln of 2036 Bunds. UK announces the size of the upcoming 2033 gilt auction.
• ENERGY: Weekly DoE energy inventory data is due; afterhours on Tuesday, API data reportedly showed headline crude stocks posting a larger than expected draw of -9.1mln bbls (exp. -3.4mln), Cushing stocks were down by -1.4mln bbls, distillates drew down by slightly less than expected at -1.0mln bbls (exp. -1.3mln), and gasoline drew down by a larger than expected -5.8mln bbls (exp. -2.1mln).
• EARNINGS: Notable corporate earnings reports due today include Nvidia (NVDA), Intuit (INTU), TJX (TJX), Analog Devices (ADI), Lowe’s Companies (LOW), Target (TGT), Nordson (NDSN), Hasbro (HAS), VF Corp (VFC), Urban Outfitters (URBN).
• PRIMER - NVIDIA EARNINGS (AMC): Reports at 21:20BST/16:20EDT, with investors closely watching the metrics given Nvidiaʼs leadership in AI. Nvidia continues to benefit from surging capital expenditure, with AMZN, GOOGL, META and MSFT already committing USD 695-725bln in 2026. Meanwhile, since the last earnings report at Nvidiaʼs GTC event, CEO Huang said last year saw around USD 500bln in high-confidence demand and purchase orders for Blackwell and Rubin, and now sees at least USD 1tln in demand through 2027, adding he is certain computing demand will be much higher than that. In the last earnings report, Nvidia guided Q1 revenue to between USD 76.44-79.56bln, above the expected USD 72.78bln. For this quarter, adjusted EPS is seen at 1.78 and revenue at USD 78.98bln. For the next quarter, profit and revenue are projected at USD 1.96 and USD 96.78bln, respectively, while FY EPS is seen at USD 8.36 and revenue at USD 371.66bln. Nvidia shares have surged recently, rising 20% over the last month and 26.5% YTD to fresh record highs. Barronʼs wrote that Nvidiaʼs rally is only getting started and that the stock remains cheap. Ahead of earnings, Cantor Fitzgerald reiterated its ‘Overweightʼ rating, maintained Nvidia as a ‘Top Pickʼ, and raised its PT to USD 350 from USD 300. While it will not be reflected in these earnings metrics, CEO Huang may also be asked about his recent China visit, where US President Trump said the H200 did not come up in talks with China.