EUROPEAN OPEN: Oil majors in focus amid Venezuela; AIR FP reportedly topped 2025 delivery goal; ASML upgraded, top pick at Bernstein; BAYN GY added to GS conviction list, AZN LN and INGA NA removed

• EUROPEAN OPEN: European equities begin the first full trading week of the year with gains; APAC stocks mostly rose, brushing off the US strike on Venezuela. A semiconductor-led rally lifted the KOSPI to a record, while TSMC (TSM) gained after Goldman Sachs lifted its price target. China’s RatingDog Services PMI held at 52.0; Composite edged up to 51.3. Crude futures slipped amid the geopolitical shocks, but markets showed a limited reaction as traders weighed supply stability against political risks. Analysts doubt a near-term oil boost from Venezuela, with the nation facing a lengthy recovery; JPMorgan estimates output could rise to 2.5mln BPD over the next decade from about 0.8mln currently, though near-term exports remain uncertain amid political transition and questions over continued flows to China. Meanwhile, Goldman Sachs said Venezuelan output could rise in the long term, potentially putting downward pressure on global crude prices; the bank noted Venezuela’s production has fallen sharply over the past two decades. US natural gas futures fell to their lowest level since late October as forecasts for warmer temperatures next week pointed to weaker demand for the fuel, according to Bloomberg. US Treasury yields edged lower in Asian trade, showing limited immediate reaction to the Venezuela news; the 2yr yield slipped below 3.47%, and the 10-year fell to about 4.18%; analysts said Venezuelan oil supply changes are unlikely to materially affect Treasurys. The USD rose to a two-week high after the US move to oust Venezuela’s President Maduro increased geopolitical risks; Bitcoin rose to a three-week high, while ether and other tokens also edged higher. Gold and silver rose as investors assessed heightened geopolitical risks; spot gold climbed above USD 4,420/oz, while silver rose by over 5%. Copper surged toward a record as tightening supply concerns and a broader risk-on mood lifted prices; futures rose towards the recent peak just below USD 13k/ton, with potential US tariffs and a strike at Chile’s Mantoverde mine adding to supply risks. Closer to home, an economist survey by The Times highlights that experts believe that UK unemployment could rise to an eleven-year high in 2026, following Chancellor Reeves's latest budget. Highlights today include: the UN Security Council meeting, at Colombia’s request, on the US deposing of Venezuela's Maduro; Secretary-General Guterres warned the action set a dangerous precedent. ISM manufacturing data for December is expected to see the headline little changed (exp. 48.3 vs prev. 48.2; preview below).
• STOCK SPECIFICS: In energy, Panmure Liberum said US majors will benefit most, particularly Chevron (CVX), given its existing Venezuelan presence; BP (BP/ LN) and Shell (SHEL LN) may be invited to share risks, while distressed lenders could include Ashmore and Houlihan Lokey. Shell (SHEL LN) is also reportedly looking at a return to Venezuela to claim billions of dollars from new gas projects in the region, The Telegraph reports. In industrials, Airbus (AIR FP) SE delivered 793 aircraft in 2025, exceeding its revised annual target of 790, according to Bloomberg citing sources. Deliveries accelerated in the final days of the year; BBG said that the figures are preliminary and subject to slight change. In healthcare, Sanofi (SAN FP) said the US FDA has accepted a priority review to potentially expand the approved age range of its Tzield type 1 diabetes drug, WSJ reports. The review could lower the minimum eligible age from eight years to as young as one year old. GSK (GSK LN) said China’s National Medical Products Administration has approved Nucala as an add-on maintenance treatment for adults with inadequately controlled COPD marked by elevated blood eosinophils. In consumer sectors, Next (NXT LN) is considering a cut-price bid for LK Bennett’s brand and intellectual property as the fashion retailer prepares to appoint administrators, Sky News reports; Marks & Spencer (MKS LN) and TFG London are also seen as potential suitors. In autos, Exor (EXO FP) and Ferrari (RACE IM) have renewed their shareholders’ pact until 2029; the agreement covers consultation on shareholder votes and includes reciprocal rights of first offer on any Ferrari share sales to third parties. Elsewhere in autos, Hyundai’s Chair warned that 2026 will be a tough year for the global auto industry, citing trade tensions, intensifying competition and geopolitical conflicts. In notable broker updates, ASML (ASML NA) was upgraded at Bernstein, with the price target for its ADRs raised to USD 1,528/shr (prev. USD 935/shr); Bernstein's analysts named ASML as its top pick in European semiconductors for 2026. Morgan Stanley assumed Banco BPM (BAMI IM) with an Underweight rating, Intesa Sanpaolo (ISP IM) with Overweight, and UniCredit (UCG IM) with an Equal Weight. Continental (CON GY) was upgraded at Bernstein. Bayer (BAYN GY) was added to Goldman Sachs' European Conviction List, while AstraZeneca (AZN LN) and ING (INGA NA) were removed.

TODAY'S AGENDA:

• DAY AHEAD: The UN Security Council will meet on Monday at Colombia’s request after the US attacked Venezuela and deposed President Maduro. Secretary-General Guterres warned the action set a dangerous precedent. In data, ISM manufacturing data for December (preview below), the Eurozone Sentix Index for January, BoE's monthly money supply and consumer credit statistics, Canada's Q4 business outlook update are all due. In central banks, the Bank of Israel is expected to hold its base interest rate at 4.25% in its first 2026 decision, balancing lower inflation expectations and a strong ILS against geopolitical and fiscal uncertainty; all but one of 12 economists forecast no change, with one expecting a 25bps cut. Nvidia (NVDA) CEO will give an address at the CES 2026 conference at 21:00GMT/14:00EST.
• PREVIEW - ISM MANUFACTURING (15:00GMT/10:00EST): ISM manufacturing data for December is expected to see the headline little changed (exp. 48.3 vs prev. 48.2). As a basis of comparison, S&P Global's flash PMI data for December showed US manufacturing activity continued to expand in December, but momentum weakened. Output growth slowed to a three-month low, and overall PMI eased to 51.8, the weakest in five months. New orders fell for the first time in a year, signalling softening demand despite firms maintaining higher production levels. Backlogs declined, and input buying was cut, while inventories of unsold goods accumulated again. Looking ahead, S&P said that the outlook has become more cautious: lower sales raise concerns that current production levels are unsustainable unless demand recovers, while elevated costs linked to tariffs and supply delays continue to weigh on confidence.
• WEEK AHEAD: This week's calendar highlights include: US jobs data; job gains likely stayed modest in December, capping one of the weakest years for employment growth since 2009; economists expect about 60k jobs to be added, leaving 2025 payroll growth near 670k vs 2mln in 2024; the unemployment is expected to have eased to 4.5% at the end of 2025. Canada jobs data, ISM surveys for December, Eurozone and Chinese inflation metrics are also due, while we continue to await the US administration's update on the next Fed Chair pick, which is expected to be announced early 2026. On the corporate earnings front, the docket is quiet this week, but includes: STZ and JEF. Meanwhile, the CES 2026 conference is taking place between 6-9th January, and speakers will include the likes of NVIDIA (NVDA) CEO Huang at 14:00EST/21:00GMT on Monday; AMD (AMD) CEO Su and Lenovo (0992 HK) CEO Yang on Tuesday; Caterpillar (CAT) CEO Creed and Roku (ROKU) CEO Wood on Wednesday.
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