EUROPEAN OPEN: ISP IM enters BMPS IM race; INGR agrees GBP 2.7bln TATE LN deal; AZN LN warns on UK/Europe medicines; AIR FP faces A320neo delivery delays; AF FP would consider EZJ LN proposal

EUROPEAN OPEN:

European equities have started the week lower, while APAC stocks sold off amid geopolitical jitters, Fed rate-hike fears after last week’s solid US jobs data, and positioning pressure ahead of the looming SpaceX mega IPO later this week. South Korea’s KOSPI fell sharply, triggering a circuit breaker, as leveraged retail positions in semiconductor and technology names unwound; Goldman Sachs strategists framed the selloff as a technical correction within a longer-term bull market and expect a rebound, citing reasonable valuations and strong underlying profit fundamentals. Japanese stocks also declined, with the Nikkei 225 posting its steepest daily fall since 30th March, as AI-linked names retreated; analysts also flagged liquidation ahead of the SpaceX (SPCX) IPO, expected on 12th June.
Brent climbed to around USD 97.50/bbl after Israel struck Western and Central Iran following Iranian missile attacks on northern Israel, marking the first mutual strikes since the April ceasefire. Iran vowed a full week of continuous attacks after Israel hit Hezbollah targets in Beirut’s southern suburbs, despite US President Trump urging restraint. Trump said he had been due to announce a deal with Iran this week, warned PM Netanyahu he would have no choice but to accept US-negotiated terms, and told Israel to hold off for several days to allow space for a deal, with a action plan agreed if talks fail. Separately, the US struck Iranian coastal surveillance sites on Saturday after drone and missile attacks on Kuwait, Bahrain and commercial ships in the Strait of Hormuz. Elsewhere, OPEC+ agreed virtually on Sunday to raise July production targets by 188k BPD, its fourth monthly increase, though a potential Strait of Hormuz closure may limit the impact, leaving the move largely symbolic.
Treasuries fell as strong US jobs data and renewed Iran tensions lifted Fed rate hike bets and inflation concerns; yields rose 2-5bps overnight, led by shorter-dated maturities. Traders priced a 25bps Fed hike by December, and a 16% chance of another, while analysts have been revising dovish calls, with Goldman Sachs no longer expecting a Fed cut this year.
Gold fell overnight and entered European trading below USD 4,300/oz, extending last week’s nearly 5% decline, its worst since the April ceasefire, as the Iran-Israel escalation and stronger US jobs data reinforced rate-hike expectations. Copper was flat overnight after Friday’s drop, its largest single-day fall since mid-March, while Shanghai Futures Exchange inventories fell to the lowest level this year amid steady Chinese buying; Bloomberg notes US-bound flows ahead of a June tariff determination deadline have drained supplies elsewhere.
Bitcoin rebounded to over USD 64,200 in Asia after falling towards USD 59k on Friday and breaching USD 60k for the first time since Trump’s 2024 election win; Bloomberg said Strategy Chairman Saylor hinted at further purchases.
DATA: REC/KPMG reported that UK permanent staff placements fell at their fastest pace in ten months in May, with firms citing low confidence, rising costs, and political uncertainty following local elections that left PM Starmer facing a likely leadership challenge; temporary hiring rose at its fastest pace in over three years as employers sought flexibility. German factory orders fell by -3.8% M/M in April (exp. -1.2%); foreign orders fell 4.2%, with Eurozone orders down 11.1%, while domestic orders were down 2.9%.

STOCK SPECIFICS:

TECH: Nvidia (NVDA) and SK Hynix (HXSCL) announced a multiyear technology partnership covering next-generation memory for Nvidia AI servers, PCs and robotics; the deal spans Vera Rubin, Vera CPUs, RTX Spark PCs and Jetson Thor, while extending into semiconductor design, AI factory infrastructure, digital manufacturing, SK Telecom collaboration and autonomous manufacturing tools. Nvidia CEO Jensen Huang said that AI-related stocks are currently very cheap, and recent stock volatility is a chance for investors to accumulate.
HEALTHCARE: AstraZeneca (AZN LN) CEO said it could be forced to withhold new medicines in the UK and Europe if it did not secure higher prices, leaving the company to almost exclusively focus on the US market. Elsewhere, AZN announced positive results from a prespecified interim analysis of the I CAN Phase III trial evaluating Ultomiris, which met the primary endpoint of change from baseline. Novo Nordisk (NOVOB DC) said real-world evidence showed semaglutide 2mg and tirzepatide had similar one-year HbA1c outcomes, with semaglutide showing higher 5% weight-loss achievement. Roche (ROP SW) and Nurix Therapeutics agreed a global bexobrutideg collaboration, with Roche licensing the BTK degrader for up to USD 2.3bln including USD 700mln upfront.
FINANCIALS: Banco BPM (BAMI IM) said it has unanimously approved approaching Monte dei Paschi (BMPS IM) to explore a merger of equals; However, Intesa Sanpaolo (ISP IM) has now entered the race to compete for the acquisition of BMPS, offering EUR 10.09/shr (a 12.5% premium vs BMPS’ closing price on Friday). Santander (SAN FP) CEO Botin criticised UK bank taxes, telling the FT that taxing banks more heavily than other companies makes no economic sense.
INDUSTRIALS: Airbus SE (AIR FP) has reportedly notified some customers of delays of a few months for A320neo-series jets due in 2027 and 2028, with A321neo aircraft most affected; supply-chain issues, including challenges with Pratt & Whitney, continue to pressure output. Of note for UK defence stocks, the government plans to cut GBP 6bln in capital investment for schools, hospitals, and other projects over four years to help fund a GBP 15bln increase in defence spending; the MoD accepted a smaller package than the GBP 18bln it had sought. The Defence Investment Plan, originally due in autumn 2025, is to be published before the NATO summit on 7-8th July. Air France-KLM (AF FP) CEO Ben Smith said he would consider Castlelake’s EasyJet (EZJ LN) proposition, while noting no current involvement; Castlelake has until the end of the month to declare its intentions, and requires a European partner given regulatory restrictions on US majority ownership of European airlines. United Airlines (UAL) CEO accused Rolls-Royce (RR/ LN) of poor A350-1000 engine support, and contractual failures; Rolls-Royce denied breaches.
CONSUMER: Ingredion (INGR) agreed to acquire Tate & Lyle (TATE LN) for GBP 2.7bln (or 615p/shr), representing a nearly 60% premium to the pre-announcement share price. Carlsberg (CARLB DC) is preparing to file draft papers for an IPO of its India unit as early as this month, potentially raising up to USD 700mln; the secondary share sale could occur later this year.
BROKER UPDATES: Porsche (P911 GY) upgraded at UBS; Goldman Sachs upgraded Clariant (CLN SW) and Givaudan (GIVN SW), downgraded Evonik (EVK GY), Symrise (SY1 GY), Arkema (AKE FP), DSM-Firmenich (DSFIR NA); Harbour Energy (HBR LN) downgraded at Jefferies; National Grid (NG/ LN) downgraded at Deutsche Bank; TP ICAP (TCAP LN) initiated with Buy at Deutsche Bank.

DAY AHEAD:

EVENTS: Apple WWDC 2026 (8-12th June).
DATA: In North America, the US NY Fed Survey of Consumer Expectations for June due, ahead of CPI and PPI date later this week.
CENTRAL BANKS: The Fed is on blackout ahead of its 16-17th June confab.
OPTION EXPIRIES: Bund, Bobl, Schatz, OAT and BTP June 2026 futures expiry.
EARNINGS: Notable companies reporting today include: Campbell’s (CPB).
WEEK AHEAD: Highlights include US CPI, PPI, China inflation; Apple WWDC; policy announcements from the BoC and ECB; UK GDP. Notable corporate earnings due this week include: Oracle (ORCL), Adobe (ADBE), Casey’s (CASY), J.M. Smucker (SJM), Lennar (LEN).
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