EUROPEAN OPEN: MKS LN misses LFL sales expectations; TSCO LN sees FY profit in upper-end of guidance range; Trump aims at defence companies; AM FP deliveries above expectations

• EUROPEAN OPEN: European equities have opened slightly lower following an overnight APAC session where stocks eventually traded mostly negative after a similar handover from Wall Street, where the S&P 500 and DJIA pulled back from record highs. Global equity futures saw a lift higher in premarket trade after reports suggested that China is set to approve some Nvidia (NVDA) H200 chip purchases as soon as this quarter (see below). Treasury yields were mixed in APAC trading, with short- and medium-term yields lower and long-end little changed ahead of jobless claims and remarks due from Fed governor Miran (super-dove, voter); in Europe, traders also eye heavy bond issuance today. Gold and silver fell for a second day as traders braced for annual commodity index rebalancing that could trigger futures sales worth billions, Bloomberg reports; spot gold slipped below USD 4,420/oz, as passive funds adjusted holdings following last year’s strong rallies. Oil prices edged higher as traders weighed the prospect of increased US control over Venezuelan oil flows, following recent policy moves and negotiations involving Washington and Caracas; the developments added uncertainty to supply expectations amid ongoing geopolitical and regulatory shifts affecting Venezuela’s crude exports. The Trump administration unveiled a strategy to take control of 30-50mln bbls of Venezuelan crude; the move would revive Venezuelan oil flows to US refineries after years of sanctions.
• STOCK SPECIFICS: In tech, China is set to approve some Nvidia (NVDA) H200 chip purchases as soon as this quarter, Bloomberg reports citing sources; the chips would be barred from use by state bodies and critical infrastructure, but Beijing is expected to permit their use by commercial companies. Elsewhere, Nvidia is reportedly requiring Chinese customers seeking its H200 chips to make full upfront payments, as the company seeks to hedge against uncertainty over Chinese regulatory approval for the shipments. In consumer sectors, AB Foods (ABF LN) warned of a lower annual profit, citing weak demand at Primark in continental Europe and subdued US demand at its food business; the Primark owner said softer consumer conditions in those markets are weighing on performance. Marks & Spencer (MKS LN) reported Q3 revenue +24.2% Y/Y at GBP 4.99bln, and LFL food sales rose +5.6% (exp. +7%); the retailer said it plans to accelerate its reshaping strategy in 2026 amid an uncertain consumer environment. Tesco (TSCO LN) forecast FY adj. operating profit at the upper end of its GBP 2.9–3.1bln guidance range after seeing a +3.2% rise in underlying UK sales over the Christmas period; the supermarket said it gained market share, ending 2025 with a 28.7% UK grocery share, despite subdued consumer confidence. Greggs (GRG LN) reported Q4 total sales +7.4% Y/Y, and LFL sales +2.9%; FY25 total sales reached GBP 2.15bln (exp. 2.01bln). Greggs said trading continues to outperform with market share gains, and it expects FY25 results to be in line with expectations, while it sees lower LFL cost inflation in 2026 despite weak consumer confidence. Of note for alcoholic beverage makers, Constellation Brands (STZ) shares rose 2.5% in US afterhours trade following quarterly earnings that exceeded expectations, signalling improving beer demand despite ongoing consumer headwinds. In industrials, of note for defence stocks, US President Trump said he will block defence contractors from paying dividends or buying back shares until production improves, criticising slow output and high costs; he also called for US military spending to be boosted to USD 1.5tln from the earmarked USD 1.0tln. Dassault (AM FP) reported 26 Rafale deliveries (vs guidance of 25), and 37 Falcon deliveries (guidance was 40); it raised 2025 net sales guidance to over EUR 7bln (from EUR 6.2bln in 2024). Sodexo (SW FP) reported Q1 revenue of EUR 6.3bln (prev. 6.4bln Y/Y), with organic sales +1.8%, as North America posted a 1.5% organic decline due to past contract losses; Europe rose 2.4%, and Rest of World 10.2%. Sodexo maintained FY organic growth guidance of +1.5–2.5%. In financials, Jefferies (JEF) shares fell after hours despite higher adj. earnings and revenue, as investors focused on a USD 30mln loss linked to its exposure to First Brands. Elsewhere, the bank said investment banking net revenues were +20% Y/Y, and equities +18% Y/Y, partly offset by lower net revenues in fixed income and asset management. A New York judge denied BNP Paribas’s (BNP FP) bid to overturn a USD 20.75mln verdict for funding a regime responsible for human rights abuses in Sudan; the judge ruled in favour of three former Sudanese refugees, rejecting the bank’s arguments. In notable broker updates, Shell (SHEL LN) was reiterated at Jefferies; TotalEnergies (TTE FP) was upgraded at Jefferies; Equinor (EQNR NO) was resumed with a Hold rating at Jefferies; Adecco (ADEN SW) was downgraded at Jefferies; Volvo (VOLVB SS) was upgraded at Goldman Sachs.

TODAY'S AGENDA:

• DAY AHEAD: Minutes from the SNB's December meeting are due, where the central bank maintained its policy rate at 0.00%, as expected, and reiterated its willingness to be active in the FX market as necessary. The ECB will publish its survey of consumer expectations for November. The BoE will publish its monthly decision maker panel data for December. EU producer prices are seen falling to -1.9% Y/Y (prev. -0.5%). EZ December sentiment indicators are expected to be mixed, though ultimately little changed. On the speakers' front, remarks are due from ECB Vice President de Guindos. Fed Governor Miran (super dove, voter) is due to speak on Bloomberg television at 13:00GMT/08:00EST, and then at an event at 15:00GMT/10:00EST. There is more jobs data out of the US today; weekly initial jobless claims are expected to rise to 210k from 199k in the 3rd January week, while continuing claims are seen easing to 1.851mln in the 27th December week, from 1.866mln prior. Challenger will report layoffs data for December, where the headline is seen rising to 89k from 71k. US Q4 labour costs and productivity data are also due. The NY Fed's December survey of consumer expectations are also out today (in November, median inflation expectations remained unchanged for 1yr ahead at 3.2%, and were steady at 3.0% for the 3yr and 5yr views). In energy, EIA weekly natgas storage change data are set for release. In supply, Spain will sell EUR 5.5-6.5bln of 2030, 2033, 2043 debt, as well as EUR 0.25-0.75bln of 2036 linkers; France will sell EUR 11.5-13.5bln of 2035, 2040, 2042, and 2056 debt; the US Treasury will announce sizes for next week's 3-, 10- and 30-year sales.