EUROPEAN OPEN: KNEBV FH to buy TK Elevator for EUR 29.4bln; RI FP and BF.B end merger talks; AZN LN Q1 profit beats on cancer demand; MBG GY confirms guidance after Q1 EBIT beat; UBSG SW profit tops expectations; ADS GY operating profit beat

• EUROPEAN OPEN: European equities opened around flat as traders monitored US-Iran talks, an extended US blockade of Iran, and ongoing disruption to global energy supplies. WSJ reported President Trump instructed aides to prepare for a prolonged blockade targeting Iran’s economy and oil exports by preventing shipping to and from its ports, judging it carried less risk than renewed bombing or stepping away from the conflict. Brent edged higher above USD 113/bbl, with the near-closure of the Strait of Hormuz continuing to disrupt global energy flows. The US also warned banks they could face secondary sanctions if they support Chinese private refiners buying Iranian oil, escalating pressure on Tehran ahead of a US-China leaders’ meeting. Gold traded slightly lower around USD 4,585/oz despite limited diplomatic progress, as the indefinite closure of the Strait continued to heighten inflation concerns. World Gold Council data showed central banks added gold at the fastest pace in more than a year in Q1, with net official-sector purchases rising to 244 tonnes from 208 tonnes Q/Q; Poland, Uzbekistan and China were the largest reported buyers. In metals, copper advanced as Chinese fabs replenished stockpiles ahead of the Labor Day holiday, with restocking supporting prices and some buyers viewing recent declines on global growth concerns as an opportunity. Iron ore futures also picked up overnight, approaching a one-month high, even after BHP Group and CMRG resolved a seven-month dispute that allowed restricted BHP ore accumulated at ports to re-enter the market, while rising costs continued to support prices. Overnight, data showed Australia’s CPI rose 4.6% Y/Y in March (prev. 3.7% in February), the highest level September 2023; the ABS said the increase reflected the impact of the energy shock; analysts expect inflation to rise further in coming months. Aussie PM Albanese ruled out new taxes on LNG exports, warning such measures would risk investment and energy security during a global crunch. In the UK, NIESR lowered its UK 2026 growth view to 0.9% (revised down from 1.4%), and raised its inflation forecast to an average 3% Y/Y, with a January 2027 peak of 4.1% Y/Y; it estimated the UK will suffer GBP 35bln in lost output across this year and next due to the Middle East conflict. Prelim Spain CPI data for April eased to 3.2% Y/Y (exp. 3.6%, prev. 3.4%), while the core rate eased to 2.8% Y/Y (prev. 2.9%); harmonised inflation rose to 3.5% Y/Y (from 3.4%), while core harmonised rose to 3.1% Y/Y (from 2.8%). Ahead, it is a busy day for macro and for earnings; German inflation data, US durable goods; Fed, BoC and BCB policy meetings; a Senate hearing on Kevin Warsh; earnings from the likes of MSFT, AMZN, META, GOOG, QCOM are due.
• STOCK SPECIFICS: In M&A, Kone (KNEBV FH) has agreed to buy German rival TK Elevator from Advent and Cinven, in a transaction valued at EUR 29.4bln, which would create the world’s largest lift maker; Kone estimated planned annual run-rate synergies of about EUR 700mln; shareholders representing 40.3% of outstanding shares and 74.3% of votes agreed to support the deal. Pernod Ricard (RI FP) and Brown-Forman (BF.B) have ended discussions on a potential business combination after failing to reach mutually acceptable terms. Pernod said it remains focused on its strategy and operating model. In tech, NXP Semiconductors (NXPI) shares jumped by 16% in extended trading after a Q1 beat-and-raise, underpinned by an ongoing recovery in industrial and automotive chip markets as customers clear excess inventory and orders improve. In communications, T-Mobile (TMUS) shares rose 2.3% in extended US trading after it reported better-than-expected earnings and revenue, stronger postpaid net account additions, raised net account addition guidance, and added support from the SuperBroadband launch with Starlink. In healthcare, AstraZeneca’s (AZN LN) Q1 profit grew more than expected, supported by demand for its cancer medicines. EPS excluding some items was USD 2.58 (exp. 2.55); said it remains on track to achieve its 2030 targets, and confirmed guidance. Canada approved its first generic versions of Novo Nordisk’s (NOVOB DC) Ozempic, with Health Canada assigning drug identification numbers to semaglutide injections; Novo’s protection against generics in Canada expired on 4th January, paving the way for cheaper access to the diabetes drug. In consumer sectors, Starbucks (SBUX) shares jumped by 5% in extended trading after it reported better-than-expected Q2 results, stronger SSS and traffic growth, and a raised FY guidance, with management stating that its turnaround is taking hold despite higher gas prices. Adidas (ADS GY) reported Q1 operating profit of EUR 705mln (exp. 647mln); FX-neutral group net sales +14% to EUR 6.6bln, helped by strong demand and football gear sales ahead of the FIFA World Cup 2026, despite some Middle East declines; all markets saw double-digit growth in DTC, reflecting continued strong demand and sell-out trends for adidas products; confirmed FY26 outlook. Mercedes (MBG GY) remains confident of recovering operating earnings despite lower Q1 revenue and profitability. Expects new auto models to help lift sluggish sales, with more than 40 models reaching showrooms between last year and next. Reported Q1 adj. EBIT EUR 1.77bln (exp. 1.63bln), Q1 revenue EUR 31.6bln (exp. 31.9bln), Q1 EPS 1.49 (prev. 1.74 Y/Y). Confirmed guidance. Volvo Cars (VOLCARB SS) reported a fall in Q1 operating profit, and said Q2 profitability is expected to be affected by continued headwinds and the production start and ramp-up of its new EX60 model. In financials, Visa (V) shares rose 4.5% in extended trading after it reported a Q2 beat, supported by strong transaction volumes, resilient consumer spending, solid cross-border activity and continued strength across payments, money movement and value-added services. UBS (UBSG SW) Q1 net profit +80% Y/Y to USD 3bln (exp. 2.8bln), and underlying PBT +54% to USD 3.9bln (exp. 3.2bln); CET1 increased; plans further buybacks after repurchasing USD 900mln in Q1; is confident in its FY26 targets, remains on track to complete the Credit Suisse integration by year-end; exec said Swiss capital requirement developments would not change its identity, diversified business model, or global and regional footprint. Deutsche Bank (DBK GY) reported higher-than-expected Q1 profit and revenue as trading held up and income rose from asset management and retail banking; Q1 revenue EUR 8.7bln (exp. 8.53bln), Q1 pretax profit EUR 3bln (exp. 2.78bln), FIC sales & trading revenue EUR 2.85bln (exp. 2.87bln). Banco Santander (SAN SM) Q1 net income of EUR 5.5bln (exp. 5.0bln), EPS 0.36 (exp. 0.26), NII 5.46bln (exp. 4.97bln); Q1 loan provisions EUR 3.23bln (exp. 3.17bln); said profit was supported by strong lending revenue and fees; reaffirms 2026-28 targets. In industrials, Airbus (AIR FP) Q1 adjusted operating profit -52% Y/Y to EUR 300mln (exp. 378mln), sales EUR 12.65bln (exp. 12.6bln), EPS was EUR 0.74 (exp. 0.44); deliveries fell to 114 commercial aircraft (from 136); backed guidance for 870 deliveries in 2026. In energy, TotalEnergies (TTE FP) raised shareholder returns after Q1 profit rebounded on soaring oil and gas prices; plans Q2 share buybacks of up to USD 1.5bln (vs USD 750mln targeted in Q1), and increased its quarterly dividend to EUR 0.90/shr (prev. 0.85).

DAY AHEAD:

• DATA: In Europe, Germany’s April CPI  is expected to rise to 3% Y/Y (prev. 2.7%). Eurozone sentiment gauges and consumer inflation expectations (exp. 48, prev. 43.4) are also due. In North America, March durable goods orders are seen rising 0.5% M/M (prev. -1.4%), and the advance goods trade balance will be released (prev. USD -83.5bln); Atlanta Fed will update its GDPNow tracking estimate.
• CENTRAL BANKS: The Fed is expected to leave rates unchanged at 3.50-3.75% (see below for preview); the BoC is also expected to hold at 2.25%; Brazil’s BCB is seen cutting rates by 25bps to 14.5%.
• SPEAKERS: Fed’s Powell (voter, neutral) speaks after the policy announcement. BoC’s Macklem speaks post-policy announcement.
• EVENTS: The Senate Banking Committee is expected to advance Kevin Warsh’s nomination as Fed Chair to the full Senate today; the vote is set for 10:00EDT/15:00BST; Republican Senator Tillis dropped his block after the DoJ ended an investigation into current Chair Powell, which Tillis saw as a threat to Fed independence.
• SUPPLY: Germany sells EUR 5bln of 2036 debt; Italy sells EUR 4.5-5.5bln of 2031 and 2035, as well as 2036 CCTeus.
• ENERGY/METALS: The weekly DoE energy inventory report is due; afterhours on Tuesday, the API’s gauge reportedly showed headline crude stocks posting a surprise draw of -1.8mln bbls (exp +0.3mln), Cushing posting a draw of -0.8mln bbls, distillate seeing a slightly larger than expected draw of -2.6mln bbls (exp. -2.3mln), while gasoline stocks posted a much larger than expected draw of -8.5mln bbls (exp. -2.1mln). Separately, Copper, silver and gold April 2026 futures also expire today.
• EARNINGS: Notable companies reporting today include: Alphabet (GOOGL), Microsoft (MSFT), Amazon (AMZN), Meta Platforms (META), AbbVie (ABBV), AstraZeneca (AZN), Amphenol (APH), QUALCOMM (QCOM), Equinix (EQIX), Carvana (CVNA), General Dynamics (GD), Automatic Data Processing (ADP), Regeneron (REGN), O’Reilly Automotive (ORLY), Phillips 66 (PSX), Aflac (AFL), Allstate (ALL), Garmin (GRMN), Ford (F), eBay (EBAY), Old Dominion (ODFL), Chipotle (CMG), Yum! Brands (YUM), GE Healthcare (GEHC), Cognizant (CTSH), Biogen (BIIB), Humana (HUM), Bunge Global (BG), SoFi Technologies (SOFI), Verisk (VRSK), Stanley Black & Decker (SWK), MGM Resorts (MGM), Etsy (ETSY).
• PRIMER - FED PREVIEW (19:00BST/14:00EDT): The Fed is widely expected to leave rates unchanged at 3.50-3.75%, with focus squarely on Chair Powellʼs guidance, as policymakers assess the inflationary impact of the ongoing US-Iran conflict. The recent surge in oil prices has pushed back rate cut expectations, with a Reuters poll showing a majority of economists now see easing delayed until at least September. Traders also seek details about Powellʼs future, with this meeting expected to be his last as Fed Chair, providing Kevin Warsh is approved in time. See Newsquawk’s full Fed preview.
• PRIMER - BOC PREVIEW (14:45BST/09:45EDT): The BoC is expected to hold rates at 2.25%, according to all 41 economists surveyed by Reuters. More than 80% (33/41) see rates unchanged in 2026, slightly up from 76% in March. At its last meeting, the central bank agreed to keep its options open amid increased upside risks to inflation and downside risks to growth from the Middle East conflict. The governing council removed language saying it “judges the current policy rate remains appropriate”. That was reinforced by March headline CPI and PPI readings, which showed notable acceleration due to surging energy prices. The BoC’s average CPI measure also showed its first acceleration YTD, to 2.37% Y/Y from 2.33%. Adding to uncertainty over the Middle East, free trade negotiations with the US and Mexico are up for renegotiation, with the 1st July deadline approaching. Before the war, consumers had become less negative about their spending plans than in the previous quarter as downward pressure from trade tensions eased. However, that has likely reversed given the surge in gasoline prices. Employment showed a modest rebound in March in line with expectations, as part-time and full-time employment showed little change, leaving the unemployment rate steady at 6.7%. Money markets expect one rate hike by year-end, while only 14/34 economists surveyed by Reuters see that outcome by 27th March. See Newsquawk’s full BoC preview.