EUROPEAN OPEN: OCDO LN top investor calls for Chair removal; AIR FP H1 deliveries rise Y/Y to about 350 jets; RHM GY assesses F126 frigate cancellation impact; R3NK GY to acquire David Brown Defence; SUBC NO and SPM IM merger faces Phase 2 review

EUROPEAN OPEN:

• European equities are higher after the open; futures of both the broad Stoxx 600 and narrower Euro Stoxx 50 are primed for weekly gains. On Wall Street, WSJ notes that the weak US jobs data on Thursday sparked a rotation trade, lifting the Dow to a record, while the Nasdaq slid as investors moved from AI and chip stocks into healthcare and consumer staples. Still, overnight in APAC trade, stocks rebounded after two days of US tech-led losses, with the MSCI Asia Pacific Index and South Korea’s KOSPI gaining, as Samsung and SK Hynix shares rose sharply.
• Japanese FinMin Katayama overnight reiterated that authorities are ready to respond on FX at any time, and remain in close contact with the US; USDJPY fell below 161 as she spoke, before recovering, though the downside has resumed as Europe arrives. She avoided threatening “bold actions”, and said she expects the BoJ to conduct policy appropriately. Options traders are hedging against sharp JPY moves ahead of thin US holiday trading today, Bloomberg reports; one-week USDJPY risk reversals turned more negative, and butterfly spreads widened, signalling demand for protection. The speculation centres on Japan potentially intervening less predictably after spending JPY 11.73tln on yen buying through 28th May.
• Gold rose towards USD 4,200/oz after weak US jobs data lowered expectations for Fed rate hikes. Comex gold is on course to end the week higher, seeing its largest weekly gain since May, and less-hawkish remarks from Fed Chair Warsh; swap markets price an 18% chance of a July hike, down from over 30% earlier in the week, according to CME data.
• Crude steadied, with Brent above USD 72/bbl and WTI above USD 69/bbl, as Strait of Hormuz flows increased. Saudi crude exports have now risen to 90% of pre-war levels, Bloomberg said. Citigroup analysts forecast Brent prices falling to USD 60-65/bbl by year-end as Strait of Hormuz disruptions ease, shipping flows normalise and physical crude markets weaken, and recommended clients sell any summer rallies.
• Canada submitted plans to the Major Projects Office for a 1,000km+ pipeline stretching to the British Columbia coast, targeting a September 2027 groundbreaking, and completion by 2035, as PM Carney seeks to reduce reliance on the US market. Trans Mountain Corp. and Pembina Pipeline (PBA) would build the 1mln BPD oil pipeline, which is planned to run from Alberta to a Vancouver-area deepwater port, targeting Asian export markets. Carney said the announcements would catalyse over CAD 200bln in new investment.
• In Germany, Chancellor Merz told ARD that a package of coalition reforms could allow economic growth to exceed 1% in 2027, against a government forecast of 0.9%; the package includes EUR 10bln in annual income tax relief as part of a wider push to revive growth, after the government halved its 2026 GDP forecast to 0.5% in April.
• In the UK, traders note a radio interview given by the likely next UK PM, Andy Burnham, who said the Labour manifesto has room for movement on tax, and adding that he will not raise VAT, income tax or national insurance, but that there is flexibility for other taxes to rise.

STOCK SPECIFICS:

• CONSUMER: A top Ocado (OCDO LN) investor has written to the Board calling for the removal of Chair Rick Warby after he attempted to oust CEO Tim Steiner and identify a replacement; the letter indicated approximately a quarter of shareholders support Warby’s removal. Of note for JD Wetherspoon (JDW LN), the UK Government announced an emergency law to allow pubs to stay open until 5am on Monday as England play Mexico in the FIFA World Cup.
• INDUSTRIALS: Airbus (AIR FP) delivered approximately 350 jets in H1 2026, up from 306 in H1 2025, with June handovers accelerating to around 90 from 81 in May, according to Bloomberg; Airbus must deliver a further 520 aircraft by 31st December to meet its annual target of 870. Rheinmetall (RHM GY) is assessing the impact of the F126 frigate programme cancellation, which will result in a shortfall in its expected quarterly nomination of EUR 20bln; the company is investigating whether the cancellation affects FY guidance; absent mitigating measures, the 2026 revenue impact could reach up to EUR 300mln. Renk Group (R3NK GY) will acquire privately held UK-based David Brown Defence, giving Renk more exposure to naval and submarine propulsion technology; earlier reports had suggested that David Brown Defence could be valued at between USD 200-250mln; transaction is expected to close in Q4. Deutz’s (DEZ GY) head of energy is targeting revenue of over EUR 1bln in the next five years, triple current levels, driven by demand from data centres and AI.
• ENERGY: An Australian watchdog has advanced the proposed Subsea7 (SUBC NO) and Saipem (SPM IM) merger to a Phase 2 review, citing concerns the deal could reduce competition in domestic offshore oil and gas projects.
• FINANCIALS: The tender offer period for UniCredit’s (UCG IM) bid for Commerzbank (CBK GY) closes today, with UniCredit’s exposure expected to approach 60%. Results will be published on 8th July. Barclays (BARC LN) reportedly withdrew a USD 960mln debt financing for Sound Inpatient Physicians after insufficient investor demand; the loan offered a margin of 5ppts above the benchmark and was intended to refinance existing debt. Barclays is expected to revise terms and relaunch it later.
• NOTABLE BROKER UPDATES: Maersk (MAERSKB DC) upgraded at Goldman Sachs; Close Brothers (CBG LN) upgraded at Shore Capital; Siemens (SIE GY) upgraded at Kepler Cheuvreux; OMV (OMV AT) was reinitiated with an Equal Weight rating at Morgan Stanley; Repsol (REP SM) downgraded at Morgan Stanley; Stellantis (STLAM IM) downgraded at HSBC; Bucher (BUCN SW) downgraded at RBC.

DAY AHEAD:

The Newsquawk audio and headline service will close at 18:15BST/13:15EDT on 3rd July, amid US Independence Day market closures; widgets on the Newsquawk V2 platform will continue to function as usual.

• EVENTS: US Independence Day holiday – US markets are shut.
• DATA: In Europe, S&P Global Services PMI finals for France (exp. 47.4, prev. 44.3), Germany (exp. 46.8, prev. 48.1), the Eurozone (exp. 48.9, prev. 47.7) and the UK (exp. 48.7, prev. 49.3).
• CENTRAL BANKS: ECB President Lagarde participates in a panel (no text expected); ECB’s Moulin will give an interview to Bloomberg TV; BoE Governor Bailey will participate in a panel discussion.