EUROPEAN OPEN: MC FP Q1 sales hit by Iran war; PUB FP tops growth expectations; NOVOB DC announces partnership with OpenAI; HSBA LN downgraded; SAP GY downgraded

• EUROPEAN OPEN: European equities opened firmer, following APAC stocks higher overnight, with risk sentiment supported by hopes for renewed US-Iran peace talks; the S&P 500 rose on Monday, erasing all losses since the start of the Iran war. President Trump said Iran had contacted the US and wanted a deal “very badly”, while a US official said talks were still continuing and progress was being made. The US and Iran are discussing a second round of talks, potentially in Islamabad on Thursday, though nuclear weapons and any Strait of Hormuz blockade remain key sticking points. Brent fell below USD 99/bbl, as the sides worked to arrange face-to-face negotiations before the two-week ceasefire announced on 7th April expires. Gold rose towards USD 4,770/oz after a two-day decline, as signs of diplomatic engagement slightly eased inflation concerns. Copper hit a one-month high and other industrial metals also advanced on optimism around talks, though investors remain cautious over escalation risks. Bitcoin climbed to a four-week high before trimming gains as broader risk assets firmed. In energy, UK natgas supply is seen as sufficient this summer despite Iran war-related disruption, with National Gas Transmission expecting domestic output and Norwegian flows to meet demand during the lower-consumption warmer months. ECB’s Villeroy called for vigilance on inflation after the central bank’s monthly survey of around 8,500 firms showed the share planning price increases will double this month due to the Iran war, while uncertainty rose to levels not seen since Russia’s 2022 invasion of Ukraine. In trade, China’s export growth slowed sharply to 2.5% Y/Y in March, missing forecasts after February’s near-40% gain, while imports surged amid energy-related disruption; analysts said Lunar New Year distortions and a high base likely exaggerated the slowdown. China’s crude imports fell 2.8% Y/Y in March to 49.99mln tons, though YTD imports rose 8.9% as stockpiling continued. Elsewhere, the EU reached a prelim deal to cut tariff-free steel imports by 47% to 18.3mln metric tons per year and double out-of-quota duties to 50%, while also moving to phase out Russian steel imports, potentially by September 2028. On the data front, UK BRC LFL retail sales rose 3.1% Y/Y in March 2026 (exp. 0.9%, prev. 0.7%), marking the strongest growth since April 2025. German wholesale prices rose by +2.7% M/M in March (exp. 0.4%, prev. 0.6%); the annual rate rose to 4.1% Y/Y (prev. 1.2%). The data prompted a modest downtick in Bund futures, while EUR briefly rose before paring gains. Final Spanish inflation for March printed 1.2% M/M (exp. 1.0%), with the annual rate at 3.4% Y/Y (exp. 3.3%).
• STOCK SPECIFICS: In consumer sectors, LVMH (MC FP) said the Iran war cut quarterly group sales by at least 1%, with Gulf disruption and fewer European tourists weighing, while Q1 organic sales rose 1% and fashion and leather fell 2%. Sinochem warned it may legally appeal Italy’s discriminatory golden power curbs on Pirelli (PIRC IM), which cut its board seats to three from eight and apply until its 34% stake falls below 9.99%. Imperial Brands (IMB LN) reiterated FY26 targets despite Middle East H2 uncertainty, expecting at least high-single-digit EPS growth, at least 5% adj. operating profit growth, and at least GBP 2.2bln FCF. In healthcare, Novo Nordisk (NOVOB DC) has partnered with OpenAI to deploy advanced AI globally across drug discovery and commercial operations, while upskilling its workforce to support healthcare transformation. In energy, BP (BP/ LN) said Q1 oil trading results should be exceptional, net debt is expected at USD 25-27bln from just over USD 22bln, and refining margins should add USD 100-200mln. Chevron (CVX) agreed an asset swap with PDVSA in Venezuela, increasing its Petroindependencia stake to 49% and gaining Ayacucho 8 rights in exchange for gas licences and western JV interests. Shell (SHEL LN) is expected to sign a deal later this week to develop Venezuela’s Loran gas field with Manatee as a single project, accelerating output from the 7.3tln-cubic-foot field. In materials, Germany’s Expert Council for Environmental Issues reportedly proposed a tax on materials used in primary buildings, but the German Environment Minister rejected the idea of further tax increases. Givaudan (GIVN SW) reported Q1 sales of CHF 1.88bln, up 2.8% LFL, led by Fragrance & Beauty, while Taste & Wellbeing fell 0.4%, and reiterated 2030 LFL growth targets. In communications, Publicis (PUB FP) reported Q1 organic net revenue growth of 4.5% (exp. 4.3%), with US growth of 4.7%; it reiterated FY guidance for 4-5% organic net revenue growth. Telecom Italia’s (TIT IM) board appointed Evercore and Goldman Sachs as financial advisers, and Bonelli Erede and Gatti Pavesi Bianchi Ludovici as legal advisers on Poste Italiane’s (PST IM) offer. In tech, Nvidia (NVDA) denied reports it is discussing a PC maker acquisition, calling them false; Dell Technologies (DELL) and HP (HPQ) shares fell in afterhours trading following the update. In industrials, Maersk (MAERSKB DC) announced the temporarily revision of rates for cargo insurance and cargo care for shipments loaded or discharged in ports of Saudi Arabia, UAE, Lebanon and Israel. United Airlines’ (UAL) CEO pitched a possible merger with American Airlines (AAL) to senior government officials, though any deal remains unclear and would face intense regulatory scrutiny. Amazon (AMZN) is in advanced talks to acquire Globalstar (GSAT) to bolster its satellite operation and rival Starlink, with a deal potentially announced as soon as Tuesday. In notable broker updates, Safran (SAF FP) was initiated at BNP Paribas with a Neutral; Nestle (NESN SW) was reinstated at Bank of America with a Buy; Henkel (HEN3 GY) was reinstated at Bank of America with an Underperform; Schindler (SCHN SW) was upgraded at Barclays; Michelin (ML FP) was upgraded at Barclays; Continental (CON GY) was upgraded at Barclays; Glencore (GLEN LN) was upgraded at HSBC; LVMH (MC FP) was reiterated at Jefferies with a Hold; Partners Group (PGHN SW) was downgraded at Citi; SAP (SAP GY) was downgraded at Piper Sandler; Barratt Redrow (BTRW LN) and Berkeley (BKG LN) were downgraded at Morgan Stanley; Barclays (BARC LN) was downgraded at BNP Paribas; ENGIE (ENGI FP) was downgraded at Societe Generale; HSBC (HSBA LN) was downgraded at BNP Paribas.

TODAY’S AGENDA:

• DAY AHEAD: In energy, the IEA will release its monthly oil market report; afterhours, the API will release weekly inventory figures. Stateside, weekly ADP employment stats (prev. +26k average per week over the four-week window), US PPI (expected to rise 1.2% M/M vs prev. 0.7%); NFIB Business Optimism Index; Fed discount rate minutes. Today’s speaker’s slate is heavy: Fed’s Goolsbee (2027 Voter, Dovish; no text expected) will take part in a panel discussion and give remarks to media separately; Fed’s Barr (Voter, Neutral; text expected) to speak on the rural economic development; Fed’s Paulson (2026 Voter, Dovish; no text expected) to discuss rural investment; Fed’s Collins (2028 Voter, Neutral) and Barkin (2027 Voter, Neutral; no text expected) to participate in a fireside chat on rural investment; ECB’s Lagarde (Neutral) to participate at a fireside chat; ECB’s Lane (Dovish) to give a lecture at the University of Virginia and participate at a roundtable at the University of Virginia; ECB’s Cipollone (N/A) to participate in a pre-recorded conversation; BoE’s Bailey (Neutral) to participate on a panel at Columbia University; BoE’s Mann (Hawk) to participate at a fireside chat; BoE’s Greene (Hawkish) to deliver a speech at the Atlantic Council titled “markets, inflation and more”‘ Riksbank’s Bunge to speak on the Riksbank’s role in turbulent times. The IMF’s World Economic Outlook press briefing. In supply, Netherlands will sell EUR 2-3.0bln of 2031 debt; Germany will sell EUR 5.0bln of 2031 Bobls. Notable corporate earnings due today include: JPMorgan (JPM), Johnson & Johnson (JNJ), Wells Fargo (WFC), Citigroup (C), BlackRock (BLK).