EUROPEAN OPEN: MAERSKB DC raises outlook; SBRY LN Q1 sales rise, affirms FY27 guidance; UK to unveil GBP 5bln drone investment plan; ABBV & GMAB DC report positive Phase 3 study; ABVX FP obefazimod shows remission in harder-to-treat patients

EUROPEAN OPEN:

European equities start Tuesday trade higher, following a positive overnight lead from Asia, where the MSCI’s APAC equities gauge climbed amid a tech-driven rally, which itself extended from performance on Wall Street.
Brent prices fell, and start the European day around USD 73.50/bbl ahead of US and Iranian teams heading to Doha for talks, though there has been some confusions regarding the nature of talks; Iran said no meeting with the US was scheduled, adding that the trip focusses on ceasefire compliance, and it will not hold any negotiations at any level with the US in the coming days; other reports suggested talks may occur through Pakistani or Qatari mediators.
Morgan Stanley cut its crude price forecasts for the second time in about two weeks, citing faster-than-expected Strait of Hormuz flow recovery, strong US supply and weak Chinese demand; it now sees dated Brent averaging USD 75/bbl in Q3 and Q4 (down USD 15/bbl and USD 5/bbl, respectively), and USD 70/bbl by end-2027.
The yen weakened beyond 162 vs the USD per dollar, its lowest since 1986; FinMin Katayama said Japan stands ready to take appropriate action on the JPY at any time, while Chief Cabinet Secretary Kihara made similar remarks. HSBC said a sharp USD rally could become one of the biggest FX pain trades in H2; the bank expects gradual dollar strength through H1 2027, with potential for an “explosive” rally if the Fed signals more tightening than markets expect, or geopolitical tensions flare again.
As the ECB’s Sintra gathering gets underway, Reuters reported that the unexpectedly rapid retreat in oil prices has eased pressure on the ECB to raise rates next month, though the case for a small hike later remains firm, according to sources; a September hike is seen as more likely than July, with markets pricing just a one-in-three chance of a July move, while June inflation data, due Wednesday, could shift the timing. Meanwhile, ECB President Lagarde said Europe is becoming less vulnerable to outside shocks due to better banking and fiscal regulations and progress on the green transition; she defended June’s rate hike as a “robust decision,” not an “insurance hike”. Markets still pricing one more quarter-point move to 2.5%.
Gold extended a decline below USD 4,000/oz overnight, falling to the lowest intraday level since November, as the US and Iran sent conflicting signals ahead of talks due to begin Tuesday in Doha, before recovering; bullion starts the European day around 4,030/oz.
In data releases, French HICP fell -0.3% M/M in June (prev. 0.10%), and the annual rate fell to 2.0% Y/Y (prev. 2.8%). German import prices rose +0.7% M/M in May (prev. 1.2%), with the annual rate climbing to +6.8% Y/Y (prev. 5.3%). German retail sales rose +1.1% M/M in May (prev. -0.3%), with the annual rate at 1.8% Y/Y (exp. 0%). In the UK, Final Q1 GDP growth printed +0.6% Q/Q (exp. 0.6%), with the annual rate at 0.9% Y/Y (exp. 1.1%, prev. 1.0%); business investment rose by +0.9% Q/Q in Q1 (exp. 0.7%). Lloyds reported business confidence fell in June to +44 (exp. +48, prev. +47); the net balance in confidence about the wider economy fell to +31, below the 12-month average of +38. The BRC reported shop price inflation held steady in June, at 1.2% Y/Y (exp. 1.3%); fresh food inflation fell to 2.8% Y/Y (prev. 3.4%), helped by bumper crops of strawberries and ice cream promotions.

STOCK SPECIFICS:

CONSUMER: Stellantis (STLAM IM) plans to sell a new China-made Jeep model in Europe by 2030; it will be jointly produced with Dongfeng Motor. Stellantis said it aims to offer six Jeep models in Europe by the end of the decade, vs two now. BMW (BMW GY) will present the latest X5 SUV at its Spartanburg, South Carolina plant, Handelsblatt reports; the factory will also produce battery-electric vehicles after about USD 1.7bln of investment, with six fully electric models planned by 2030, despite weaker US EV demand and rival pullbacks. Sainsbury (SBRY LN) Q1 sales +3.1% Y/Y at GBP 8.04bln, grocery sales +3.6% Y/Y to GBP 7.6bln, like-for-like sales +2.1%; affirmed FY27 guidance, sees total underlying operating profit between GBP 0.975-1.08bln, and retail free cash flow of more than GBP 500mln.
INDUSTRIALS: UK PM Starmer will unveil a defence investment plan today, including GBP 5bln for drones and other uncrewed systems, though it is unlikely to satisfy senior officers’ demands for additional funding, the FT says. Maersk (MAERSKB DC) raised its FY profit outlook, citing stronger-than-expected container demand, especially in Asia; it increased its underlying EBITDA, EBIT and free cash flow forecasts, and now expects global container volume growth of about 4% this year (prev. saw between 2-4%). Bureau Veritas (BVI FP) announced it has entered exclusive negotiations with Triton Partners for the sale of its Oil & Petrochemicals and Coal testing and inspection business at a price of EUR 470mln.
HEALTHCARE: AbbVie (ABBV) and (GMAB DC) reported positive Phase 3 EPCORE DLBCL-4 results, with epcoritamab plus lenalidomide improving progression-free survival versus standard of care and cutting progression or death risk by 56-60%. Sanofi (SAN FP) said its Nexviazyme met all primary and secondary endpoints in infantile-onset Pompe disease Phase 3 study. Abivax (ABVX FP) said its experimental ulcerative colitis drug helped harder-to-treat groups of patients achieve remission, with 37.2% of patients who had not responded to an initial induction treatment of obefazimod achieved clinical remission after continued treatment, while ⁠34.5% achieved endoscopic remission. Roche (ROP SW) said the FDA has accepted and granted priority review to a supplemental BLA for Enspryng for the treatment of thyroid eye disease; a decision will be made by 15th October.
NOTABLE BROKER UPDATES: EasyJet (EZJ LN) was downgraded at Citi, RBC and UBS; Mondi (MNDI LN) downgraded at UBS

DAY AHEAD:

GEOPOLITICS: US and Iranian technical teams were due in Doha for talks, though Iran said no meeting with the US was scheduled; the US has dispatched envoys Jared Kushner and Steve Witkoff.
DATA: In Europe, Germany preliminary June inflation — headline seen rising +0.1% M/M (prev. -0.2%) though seen easing to 2.5% Y/Y (prev. 2.6%); HICP is expected to rise +0.4% M/M (prev. -0.1%), with the annual rate unchanged at 2.7% Y/Y. Germany June unemployment rate is seen rising to 6.4% (prev. 6.3%). In North America, US JOLTs job openings for May (exp. 7.28mln, from 7.618mln); previously, the quits rate fell to 1.9% from 2.0%, while the vacancy rate was at 4.6% from 4.2%. US CB consumer confidence for June (exp. 94.2, prev. 93.1); Chicago PMI for June (prev. 62.7); S&P/Case-Shiller home price index for April (prev. 1.0% M/M); Canada preliminary May GDP (exp. 0.1% M/M, prev. 0.4%).
CENTRAL BANKS: ECB Sintra forum in Sinta takes place, and will today feature ECB’s VP Vujcic, ECB chief economist Lane, ECB’s Schnabel, ECB’s Sleijpen, ECB’s Wunsch, ECB’s Elderson, and ECB’s Cipollone; BoE’s Breeden will also participate on a panel at the event. Fed’s Hammack (2026 voter) will give an interview to CNBC TV.
OPTION EXPIRIES: Brent August 2026 futures expiry.
ENERGY: API weekly energy inventories due after hours.
EARNINGS: Notable US corporate earnings due today includes: NIKE (NKE) and Constellation Brands (STZ).