EUROPEAN OPEN: INTC slides on guidance; ERICB SS raises dividend, proposes SEK 15bln buyback; BAS GY misses FY expectations; BAB LN significant contract; NESN SW proceeds with selling stake in water unit

• EUROPEAN OPEN: European equities are seeing a more muted start on Friday, however; on the week, futures of the narrow Euro Stoxx 50 are on course for a fourth week of gains, while the broader Stoxx 600 is set to snap three weeks of gains. Overnight, APAC stocks traded entirely in the green, taking the positive lead from Wall Street, where stocks closed higher, extending on gains driven by Trump backing-off from imposing additional tariffs on EU nations over Greenland. Copper climbed toward USD 13k a ton, rising alongside other metals amid USD weakness and investor rotation away from currencies and sovereign bonds. Gold rallied toward USD 5,000/oz as a weaker USD, geopolitical risks and concerns over Fed independence fuelled record gains; the yellow metal is set for a near 8% weekly rise; silver neared USD 100/oz, while platinum also reached fresh records. Oil prices rose as a weaker dollar and a broader risk-on mood offset concerns about rising supply; Brent climbed toward USD 65/bbl, marking a fifth weekly gain, while WTI was near USD 60/bbl, as the USD posted its biggest weekly drop since June. Analysts cited by the WSJ said that the upside could possibly be a technical recovery after prior losses, adding that gains may be limited by easing geopolitical tensions linked to possible Russia-Ukraine talks. Overnight, the BoJ kept its policy rate at 0.75%, and raised growth forecasts for FY25 and FY26, while maintaining hawkish inflation views; it lifted its FY26 core inflation outlook to 1.9% (from 1.8%), signalling confidence that further rate hikes may be justified. The decision was expected by economists, and reflects caution after last month’s increase and ahead of a snap election. The JPY remained under pressure after the BoJ announcement. Separately, Japanese PM Takaichi finally dissolved the lower house to call a snap election for 8th February, seeking to strengthen her narrow majority; the campaign period will be the shortest on record at 16 days, raising concerns about voter turnout during winter conditions. Elsewhere in Asia, China is expected to set a 2026 GDP growth target range of 4.50-5.00%, signalling tolerance for modest deceleration from last year’s 5% growth, SCMP reported citing sources. Closer to home, UK households earning at least GBP 50k became more pessimistic about their finances and the wider economy in January, according to a GfK survey, despite improved sentiment overall after Chancellor Reeves’s budget. The findings suggest higher earners, a key spending group, are feeling increased strain. UK retail sales rose +0.4% M/M in December (exp. -0.1%), with the annual rate at 2.5% Y/Y (exp. 1.0%, prev. 1.8%); the upside surprise was driven by online sales, which jumped 4.4%, driven by jewellery demand; however, despite the rebound, Q4 volumes still fell 0.3%, and FY 2025 were up 1.3%. Today's docket features global PMI data, US university of Michigan sentiment gauges, and in geopolitics, Russian talks with US envoys will continue over Ukraine today.
• STOCK SPECIFICS: In tech, Intel's (INTC) shares fell 12% in extended trading after it issued softer-than-expected Q1 guidance, citing supply constraints and production efficiency challenges despite a quarterly earnings beat. Ericsson (ERICB SS) raised its 2025 dividend to SEK 3 (from SEK 2.85) and said it will propose a SEK 15bln share buyback (around USD 1.7bln), citing strong free cash flow, a solid cash position, cost cutting and proceeds from selling its US-based Iconectiv business; it reported Q4 adj. EBITDA of SEK 12.70bln (exp. 10.48bln) and revenue of SEK 69.3bln (exp. 66.6bln). In materials, BASF (BAS GY) said it expects higher net income but lower group sales for FY25,; its latest results for FY25 showed a mixed performance, despite improved profitability expectations; it reported FY sales of EUR 59.7bln (exp. 60.7bln), adj. EBITDA of EUR 6.6bln (exp. 6.87bln), EBIT of EUR 1.6bln, and net income of EUR 1.6bln, while it sees FY26 FCF at EUR -600mln. and FY adj. EBITDA of EUR 6.6bln (exp. 7.35bln). Alcoa (AA) Q4 EPS  and revenue topped expectations, sending shares 1% higher in extended US trading. In industrials, Babcock (BAB LN) said it is confident in meeting expectations for FY26, with potential upside if Indonesian Arrowhead licences are delivered. The company also announced CEO David Lockwood will retire, succeeded by nuclear division head Harry Holt. It also secured its first contract under Indonesia’s Maritime Partnership Programme, valued at USD 5.3bln, involving two Arrowhead 140 frigate licenses. In consumer sectors, Nestle (NESN SW) is proceeding with the sale of a stake in its water business, valued at about EUR 5bln, Bloomberg said; the company has invited first-round bids this month. In healthcare, Sanofi (SAN FP) confirmed Phase 3 study of amlitelimab in combination with topical therapies met all primary and key secondary endpoints at Week 24. GSK (GSK LN) received approval in China for TELEGY. In notable broker updates, Deutsche Bank downgraded Evoke (EVOK LN) and Renk (R3NK GY); Jefferies upgraded Schaeffler (SHA0 GY) and Severn Trent (SVT LN); Barclays upgraded Haleon (HLN LN) and L'Oreal (OR FP), downgraded Lindt (LISN SW) and Henkel (HEN3 GY); Morgan Stanley upgraded Pennon Group (PNN LN); Goldman Sachs upgraded Castellum (CAST SS), downgraded Holcim (HOLN SW); BofA downgraded Maersk (MAERSKB DC).

TODAY'S AGENDA:

• DAY AHEAD:* Global Flash PMI data are due (rises are expected for the Eurozone, German, French and UK gauges); US manufacturing PMI is seen rising, services is seen slipping, while the composite is seen inching up slightly. US University of Michigan prelim sentiment data for January are expected to show gains for sentiment, conditions and expectations, while 1yr inflation outlook is seen unchanged at 4.2%, and the longer-term gauge is seen rising to 3.4% from 3.2%. In energy, Baker Hughes will publish its weekly rig count data. On the speakers' slate, remarks are due from the ECB President Lagarde, and BoE hawk Greene. In geopolitics, following Russian President Putin talks with US envoys Witkoff and Kushner on a peace plan for Ukraine, further negotiations are expected today; ahead of the talks, a Kremlin aide said disagreements over territorial demands remain unresolved, limiting prospects for any long-term settlement. On the US corporate earnings front, updates are due from SLB and BAH.