EUROPEAN OPEN: LLOY LN & CBG LN may challenge FCA redress scheme; European new-car registrations rise; Private equity names eye CON GY industrial unit; BAS GY upgraded, SAP GY downgraded

• EUROPEAN OPEN: European equities opened higher; the mood as improved recently amid reports that the Iranian Foreign Minister Araghchi told US envoy Witkoff that Supreme Leader Khamenei had agreed to negotiate with the US. Overnight, APAC stocks mostly rebounded, taking the positive lead from Wall Street, after President Trump on Monday said the US would delay strikes on Iranian energy infrastructure for five days. Crude prices, however, have resumed gains after Monday’s sharp drop, as concerns grew that more countries could be drawn into conflict; the WSJ reports that Gulf states are moving closer to joining the fight against Iran, taking tougher steps on basing and finances after attacks disrupted their economies and raised the risk of Tehran gaining long-term leverage over the Strait of Hormuz. Additionally, strikes reportedly hit gas facilities in central Iran on Tuesday; Fars reported damage to a gas company’s offices and a pressure reduction station in Isfahan amid US-Israeli strikes, while there were also reports of a projectile strike on a pipeline feeding a power station in Khorramshahr. Brent prices are trading a few bucks higher, around USD 97/bbl. Analysts at ANZ expect oil to stay above USD 100/bbl in the near term due to a war premium and supply losses, and is seen averaging above USD 90/bbl this year; ANZ does not expect prices to return to the previous USD 60-70 range even if the conflict ends in March. Gold is slightly positive, and if it closes in the green today, would snap a ten day tun of daily declines, amid concerns that the Middle East continues to pressure global inflation and growth sentiment. On the trade front, the EU and Australia agreed a free trade deal, concluding almost a decade of negotiations, removing most bilateral tariffs and giving the EU greater access to Australian critical minerals; after adoption by the European Council, it must be signed by both sides and ratified by their parliaments before entering into force. In central bank speak, ECB’s Vujcic said policymakers must stay very agile and vigilant as the Iran war brings stagflation risks closer; he said officials will likely know soon whether the conflict’s fallout requires higher rates.
• STOCK SPECIFICS: In M&A, Estee Lauder (EL) confirmed it is in talks over a potential merger with Spain’s Puig, in a deal that could create a USD 40bln beauty group, FT reports; it added that talks were ongoing, and there is no guarantee of a deal. In consumer sectors, European new-car registrations rose 1.7% Y/Y in February to 979,321 units (vs prev. -3.5% Y/Y in January); Tesla’s (TSLA) registrations rose 11.8%, ending a 13-month fall, while BYD’s (BYDDY) more than doubled and both held 1.8% share; Volkswagen (VOW3 GY) and Stellantis (STLAM IM) gained, Renault (RNO FP) fell, and EU electrified-car registrations reached 67% of total. BMW (BMW GY) is recalling 179,527 vehicles in China over improperly routed air-conditioning wiring harnesses that could be damaged during air-filter replacement and, in extreme cases, cause a short circuit and fire. Apollo (APO), Bain Capital, Advent, CVC, Platinum Equity, KPS and Clearlake are reportedly bidding for Continental’s (CON GY) industrial unit, according to Bloomberg. Bellway (BWY LN) cut its FY 2026 operating margin outlook (to 10.5% from 11%) while maintaining volume guidance of 9,300-9,500 homes; it raised its interim dividend; CEO said it has seen an improvement in customer demand into the new calendar year. Kingfisher (KGF LN) reported FY26 adj. pretax profit +6% to GBP 560mln; it saw a GBP 73mln write-down due to French Castorama; guided FY27 adj. pretax profit of GBP 565–625mln. In healthcare, activist investor Inclusive Capital Partners is seeking to sell about 8.5mln Bayer (BAYN GY) shares in a placing; the stake is worth about EUR 327mln. Sanofi (SAN FP) and Regeneron’s (REGN) Dupixent was approved in Japan. In financials, Lloyds (LLOY LN) and Close Brothers (CBG LN) may join challenges to the FCA’s GBP 11bln car finance redress scheme, with banks and claims firms reportedly arguing the proposed compensation is too generous, ahead of details due 27th March. Monte Paschi’s (BMPS IM) board will continue reviewing potential steps regarding CEO Luigi Lovaglio on Tuesday; directors Monday discussed whether he can remain after he agreed to seek another term despite the lender’s plan to replace him, and requested a legal assessment before adjourning. In energy, US Interior Secretary Burgum said that it will reimburse TotalEnergies (TTE FP) USD 928mln for the cost of its two offshore wind lease, funds instead for gas and oil development. Equinor (EQNR NO) seeks to expand its US shale-gas business, and is primarily looking in the Marcellus area for opportunities. In notable broker updates, Goldman Sachs initiated Mondi (MNDI LN) with a Neutral rating, and SIG Group (SIGN SW) with a Buy rating; Deutsche Bank upgraded BASF (BAS GY) and Brenntag (BNR GY), downgraded Akzo Nobel (AKZA NA) and Givaudan (GIVN SW). Coloplast (COLOB DC) was upgraded at UBS; Bechtle (BC8 GY) was upgraded at Berenberg; Morgan Stanley upgraded Thyssenkrupp (TKA GY) and Salzgitter (SZG GY); SAP (SAP GY) was downgraded at JPMorgan.

TODAY’S AGENDA:

• DAY AHEAD: Flash PMI for March is due; analysts generally expect modest declines for the Eurozone, Germany, France, UK. Elsewhere in Europe, the UK CBI distributive trades data for March will be published. Stateside, weekly ADP jobs stats are out (last week, the series reported an average of +9k/week over the four-week window). Final Q4 nonfarm productivity and unit labour costs data will be out. In energy, CERAWeek continues, with notable speakers today including: Aramco CEO Nasser, Shell (SHEL LN) CEO Sawan, Microsoft (MSFT) President Smith, ConocoPhillips (COP) CEO Lance, ExxonMobil (XOM) Vice President Ardill, and Iberdrola (IBE SM) CEO Blazquez. Afterhours, the API will release its gauge of weekly inventories. Hungary’s central bank is expected to keep its benchmark interest rate unchanged at 6.25% on Tuesday, as Iran-related market turmoil clouds the inflation outlook ahead of April elections. On the speakers’ slate, Fed’s Barr (voter; text expected, but no Q&A) will give remarks today; last week, Barr was the sole dissenter to the proposal to ease bank capital rules, calling the reductions unnecessary and unwise; he supported some technical changes, but said weakening the US approach to Basel III could trigger a race to the bottom in standards and harm the global financial system. BoE’s Pill will speak at a conference; ECB’s Cipollone will give introductory remarks on the digital Euro; ECB’s Nagel is due to speak; ECB’s chief economist Lane will deliver remarks at an ECB conference on forecasting techniques; SNB’s Schlegel will also speak; RBNZ’s Conway to speak on the real cost of living. On today’s supply slate, Netherlands will sell EUR 1.5-2.0bln of 2056 DSLs; UK will sell GBP 2.25bln of 2035 Gilts; Germany will sell EUR 5.0bln of 2031 BOBLs; the US Treasury will auction USD 69bln of 2yr notes.