EUROPEAN OPEN: NOKIA FH & ENGI FP join Euro Stoxx 50, VOW3 GY & WKL NA to leave; LTMC IM-CIRSA SM agree merger; NESN SW sells vitamin brands for USD 1bln; BP/ LN appoints Ian Tyler as Chair; BPE IM launches EUR 750mln share buyback

EUROPEAN OPEN:

• European equities have opened lower, with the downside driven by renewed US-Iran fighting, sending oil prices and bond yields higher, and by extension, boosting global rate hike expectations. APAC stocks fell after the weak lead from Wall Street.
• Crude futures rose for a third session as renewed US-Iran attacks increased risks to Strait of Hormuz energy flows; December Brent trades higher at around USD 95.50/bbl, while October WTI is trading near USD 91/bbl. Data from the API also showed that US crude inventories reportedly drew down by 2.6mln bbls in the latest week (exp. -0.8mln), which would mark the first decline in five weeks. In Europe, natgas prices are around their highest since January 2023 amid the renewed US-Iran fighting, stoking supply concerns; Dutch TTF front-month futures have gained over 70% vs early-July levels, while European gas storage was about 65% full, the lowest seasonal level in records dating to 2009.
• US 10yr Treasury yields reached 4.81%, and markets are pricing around a 70% probability of a September Fed rate hike, and at least two increases by March next year. US 30yr yields have also risen to 5.27%, erasing gains made after Treasury Secretary Bessent expanded bond buyback support; analysts cite rising government spending, AI-related investment, and persistent inflation as pressures keeping long-term borrowing costs elevated. Bloomberg says Treasury traders have increased hedges against further bond losses; it cited a USD 6.5mln options position targeting 30yr yields reaching 5.7% by end-November.
• The US-China 10yr bond yield spread widened towards its record as Treasury yields rose; analysts said the divergence reflects tighter US policy expectations vs easier Chinese ones, though capital controls, low foreign bond ownership and yuan strength may limit outflow risks.
• USD/JPY has seen further downside overnight to beneath 160, trading a little above 159.50 as the European day begins. In APAC trade, BoJ Governor Ueda said policymakers will give greater attention to upside inflation risks as underlying inflation nears 2%; meanwhile, hawkish dissenter Takata called for nimble, data-dependent tightening, as well as broader options beyond 25bps moves, and a departure from the usual semi-annual pace of lifting rates. Markets are fully pricing a BoJ September rate hike.
• Elsewhere, the RBNZ raised its Official Cash Rate by 25bps to 2.75% (as expected), its second consecutive hike; the committee reached its decision by consensus. The central bank said that further tightening may be needed; its forecasts imply one more 25bps increase before year-end; inflation is now expected to reach the 2% midpoint in early 2028, later than previously projected.
• Gold has extended its three-day decline as higher oil prices, bond yields and inflation concerns lifted Fed tightening bets. Bullion is trading around USD 4,320/oz as the European day begins, after falling almost 6% over the last three sessions. Copper fell for a second day as higher oil prices and renewed geopolitical tensions raised global growth concerns. Three-month copper slipped below USD 14,200/ton after gains of around 4% in August.
• In trade news, Germany plans to agree measures within weeks to counter what it sees as unfair Chinese trade practices; FinMin Klingbeil said options include JV requirements for Chinese companies, additional tariffs including on hybrid vehicles, and ‘Buy European’ policies. Germany would then seek to advance agreed measures at the EU level. Elsewhere, the US is preparing to launch a Section 301 investigation into EU countries over alleged unfair trade practices, The Times reports; the UK is reportedly not expected to be included among the countries subject to investigation.

STOCK SPECIFICS:

• INDEX: Nokia (NOKIA FH) and Engie (ENGI FP) will join the Euro Stoxx 50 before trading on 21st September 2026; Volkswagen (VOW3 GY) and Wolters Kluwer (WKL NA) will leave.
• TECH: Nvidia (NVDA) is reportedly in advanced talks to acquire AI startup Hugging Face for about USD 14bln, with an agreement potentially reached as soon as this week. Dell Technologies (DELL) shares rose 9.5% in extended US trading after a quarterly beat expectations, and it sharply raised its FY outlook, driven by surging demand for AI-optimised servers and broader data centre infrastructure. Palo Alto Networks (PANW) initially rose after beating quarterly expectations and issuing strong guidance, but fell later in extended trading, with reports citing an already sharp YTD rally.
• HEALTHCARE: Roche (ROP SW) entered a licensing agreement with Simcere Pharmaceutical for development of SIM0660; Roche will pay USD 75mln upfront, while Simcere is eligible for up to USD 1.455bln in milestone payments. Aleogen (196170 KS) signed an exclusive option and licence agreement with Novartis (NOVN SW) for ALT-B4; Aleogen could receive up to USD 3.22bln if all options are exercised and all development and commercialisation milestones are achieved.
• ENERGY: US Energy Secretary Wright said forthcoming deals could more than double Venezuelan oil production within several years, Bloomberg reports. Venezuela produced 1.16mln BPD of crude in July, less than half its output a decade earlier. Chevron (CVX) is expected to announce the largest agreement, with Shell (SHEL LN), BP (BP/ LN), Repsol (REP SM), and Eni (ENI IM) also expected to sign deals. BP (BP/ LN) appoints Ian Tyler as Chair, effective immediately; Tyler was previously the Chair of Grafton (GFTU LN).
• INDUSTRIALS: Maersk (MAERSKB DC) has signed a deal to install wind sails on its container ships to reduce fuel consumption and help comply with tighter environmental regulations, FT reports.
• FINANCIALS: Intesa Sanpaolo (ISP IM) reportedly does not expect its buyout offer for BMPS (BMPS IM) to be hampered by defence bids, or by clarifications by Consob. Bper Banca (BPE IM) announced the launch of its EUR 750mln share buyback programme.
• CONSUMER DEFENSIVE: Nestle (NESN SW) agreed to sell seven mainstream vitamin brands and its US private-label supplements business to Yellow Wood Partners for USD 1bln; transaction is expected to close in H1 2027.
• CONSUMER CYCLICAL: Lottomatica (LTMC IM) and Cirsa (CIRSA SM) agreed an all-share merger, with Cirsa to be absorbed by Lottomatica; Cirsa shareholders will receive 0.668 new Lottomatica shares for each Cirsa share held; existing Lottomatica shareholders will own 67.5% of the combined group. Italian new car registrations were +3.2% Y/Y in August (prev. +3.9%); Stellantis (STLAM IM) new car registrations were +6.2% Y/Y.
• NOTABLE BROKER UPDATES: Morgan Stanley downgrades Barclays (BARC LN), upgrades NatWest (NWG LN) and ING Groep (INGA NA); Goldman Sachs upgrades Deutsche Bank (DBK GY), downgrades Societe Generale (GLE FP); Bunzl (BNZL LN) downgraded at SocGen; Pearson (PSON LN) downgraded at Citi; Berenberg downgrades DCC (DCC LN) and Mitie Group (MTO LN), initiates Eutelsat (ETL FP) with a Hold rating; InterContinental Hotels (IHG LN) upgraded at UBS; BNP Paribas downgrades Reckitt Benckiser (RKT LN), upgrades L’Oreal (OR FP); Adidas (ADS GY) upgraded at Barclays

DAY AHEAD:

• DATA: In North America, US monthly ADP employment figures are due (exp. 48K, prev. 44K); US factory orders (prev. -0.3% M/M) and weekly MBA mortgage applications data.
• CENTRAL BANKS: The BoC is expected to hold rates at 2.25% (prev. 2.25%); BoC’s Macklem and Rogers hold a post-meeting press conference. Fed’s Williams will give an interview to CNBC at 13:15BST/08:15EDT. Fed publishes its Beige Book. ECB’s Nagel is due to deliver remarks.
• ENERGY: EIA weekly energy inventories data is due; afterhours on Tuesday, API data reportedly showed headline crude stocks posting a larger than expected draw of -2.6mln bbls (exp. -0.8mln), Cushing seeing a small build of +0.2mln bbls, gasoline stocks posting a surprise build of +0.3mln bbls (exp. -2.4mln), while distillate posted a surprise draw of -0.3mln bbls (exp. -1.3mln); last week, DoE data showed weekly crude production at 13.843mln bbl/d.
• EARNINGS: Notable corporates reporting today include: Broadcom (AVGO), Snowflake (SNOW), Hewlett Packard Enterprise (HPE), NetApp (NTAP), Brown-Forman (BF.B), PVH Corp. (PVH).