EUROPEAN OPEN: SGRO LN rejects PLD GBP 12.6bln bid; FDX falls as guidance disappoints; EASA orders urgent AIR FP A380 inspections; VOW3 GY's Audi weighs lower sales target; BT/A LN pension scheme writes-off Thames Water stake

EUROPEAN OPEN:

• European equities have opened mixed. Global stocks stabilised after Tuesday’s tech-led rout, with the MSCI All Country World Index little changed following a slide in the prior session. South Korea’s KOSPI swung sharply overnight, jumping as much as 4.6% before falling 1.5%, following a 10% rout the on Tuesday, as sentiment soured on the global AI buildout and triggered a rapid unwind of leveraged positions; the index is heading for a close with gains of over 3%. Samsung rallied on a Yonhap report that said it may announce a share buyback linked to employee stock bonuses. Investors are now focused on upcoming earnings from Micron Technology (due afterhours on Wednesday) as the next test for the AI investment thesis.
• Oil extended declines as tankers crossed the Strait of Hormuz openly, with Brent a little above USD 76/bbl into the European open. President Trump said the US is making a deal with Iran and will see how it goes, adding that talks are going quite well and both sides are trying to work out a fair agreement. Separately, the US Senate voted 50-48 to pass a resolution requiring President Trump to seek congressional approval to continue the Iran war; the White House said the resolution is non-binding, and will not be sent to Trump.
• Bullion prices fell below USD 4,100/oz, as a stronger USD, tech-led equity selloff and inflation-linked rate concerns pressured sentiment and investors cut holdings for liquidity. Copper and industrial metals largely held Tuesday’s slump.
• The Dollar Index is slightly firmer. The PBoC set the yuan’s daily guidance rate weaker for a fourth straight session, at 6.8195 per dollar (vs prev. 6.8171), marking the longest streak of weaker fixings since April 2025. PBoC MPC member Huang said China may still cut interest rates this year, though the economy needs more targeted support for technological innovation and improving livelihoods beyond looser monetary policy.
• Elsewhere, the BoJ signalled the need for further rate increases in its summary of opinions from its 15-16th June meeting, when it raised the policy rate to 1%. The BoK said higher interest rates will be needed at an appropriate time as rising home prices, household debt and leveraged investment risk fuelling financial imbalances. Its Financial Stability Report said South Korea’s financial system remained broadly stable despite domestic and external uncertainty.
• Australia’s trimmed mean CPI rose 3.6% Y/Y in May (exp. 3.5%; prev. 3.4%), above the RBA’s 2-3% target; headline CPI rose 4% Y/Y (exp. 4.3%; prev. 4.2%). Housing remained the largest contributor to annual inflation, while automotive fuel prices fell. Westpac reiterated its view for the next RBA rate hike likely in August.
• Ahead, highlights include German Ifo, BoC and Riksbank meeting minutes, Fed Bank stress tests, and earnings from Micron (MU).

STOCK SPECIFICS:

• REAL ESTATE: SEGRO (SGRO LN) rejected Prologis’ (PLD) all-share takeover proposal, which valued SEGRO at about GBP 12.6bln. Under the proposal, SEGRO shareholders would have received 0.084 new Prologis shares per SEGRO share held, implying a value of 925p/shr, or a 25% premium to SEGRO’s Tuesday closing price. Prologis said it sees a clear strategic rationale for combining, and urged SEGRO shareholders to push the board to engage.
• INDUSTRIALS: FedEx (FDX) shares fell over 6% in extended trading after its weaker-than-expected profit guidance overshadowed stronger Q4 results and management’s positive comments on transformation efforts. The EASA ordered urgent inspections of 16 Airbus (AIR FP) A380 aircraft after cracks were found in wing spars; EASA said the cracks could reduce wing structural integrity. Five aircraft require immediate inspection, while 11 must be inspected within 25 flight cycles. KNDS formally filed for Paris and Frankfurt IPOs, with Germany agreeing with Wegmann to acquire 40%, investor meetings starting 24th June, and Budget Commission review moving to Friday.
• MATERIALS: A Rio Tinto (RIO LN) exec said it expects its lithium business to grow faster than its copper, iron ore and other divisions, as it works to triple lithium production by 2028 to meet demand from the EV and battery storage markets. Anglo American (AAL LN) announced a definitive agreement with Codelco to implement a joint mine plan for their adjacent Los Bronces and Andina copper mines.
• FINANCIALS: Morgan Stanley (MS) again limited redemptions at its USD 7bln North Haven Private Income Fund after 11.6% withdrawal requests, meeting 43% of the Q2 requests. Allianz (ALV GY) said ship insurers face significant Iran war claims, including possible total losses, with vessels and cargo worth USD 125bln trapped in the Persian Gulf as of 15th June.
• TECH: SK Hynix (HXSCL) is expected to file a statement with Korea’s financial regulator for an ADR offering, marking the next step toward a US listing; industry estimates put the offering’s size at as much as USD 26bln, though earlier reports suggested it could raise up to USD 10bln. The regulator’s review could conclude by 3rd July, potentially allowing trading to begin as early as next month. Leveraged ETFs tracking Samsung (SSNLF) and SK Hynix (HXSCL) likely sold a combined USD 6bln of the Korean chipmakers’ shares on Tuesday to maintain ratios, Bloomberg said; the sales accounted for about 14% of Samsung and SK Hynix turnover, underscoring how leveraged single-stock ETFs amplified market moves. STMicroelectronics (STMPA FP) unveiled the ST54M secure mobile chip, featuring post-quantum cryptography hardware acceleration; certifications are targeted for July 2026. Qualcomm (QCOM) is in talks to provide custom chip-design services to ByteDance, as it seeks to reduce reliance on smartphones, its largest revenue source, according to Reuters. Cerebras Systems (CBRS) shares fell over 10% in extended trading after the AI chipmaker forecast a decline in gross margins, overshadowing strong revenue growth in its first earnings report since going public.
• COMMUNICATIONS: BT Group (BT/A LN) confirmed that its pension scheme lost GBP 300mln after writing off its 8.7% stake in Thames Water in 2024; the disclosure comes before the scheme’s triennial valuation, which will set BT’s pension payments for the next three years. GameStop (GME) CEO Ryan Cohen will forgo a potential USD 35bln performance pay package, unveiled in January, to focus on his bid to acquire eBay (EBAY); will release further details on its eBay plans this week, including the strategic rationale and operational plan for the combined company.
• CONSUMER: Volkswagen’s (VOW3 GY) Audi is considering lowering its medium-term sales target to 2mln vehicles (from 2.2mln) and whether to build a new plant in the US, according to Handelsblatt. Nike (NKE) appointed David M. Denton as Executive Vice-President and CFO, effective 17th August; Matthew Friend will step down as CFO, and remain until 4th September to support the transition.
• UTILITIES: The UK’s grid operator issued a rare summer electricity margin notice for Wednesday evening, expecting a shortfall of 1.9 gigawatts as soaring temperatures strain the power system, and has asked plant operators to make extra capacity available.
• NOTABLE BROKER UPDATES: Berenberg initiated Barclays (BARC LN) with a Buy, Lloyds (LLOY LN) with Hold, and NatWest (NWG LN) with Buy; BT Group (BT/A LN) was initiated with a Hold at Kepler; Givaudan (GIVN SW) was upgraded at Kempen.

DAY AHEAD:

• EVENTS: US President Trump will sign Road to Housing Act at 12:00EDT/17:00BST, will attend Senate Steering Committee lunch at 13:00EDT/18:00BST, and will meet NATO Secretary General at 15:30EDT/20:30BST. Canada provincial holiday (Quebec).
• DATA: In Europe, Germany Ifo for June is expected to see the business climate at 84.2 (prev. 84.9), expectations at 83.0 (prev. 83.8) and current conditions at 85.5 (prev. 86.1). In North America, US new home sales for May (prev. -6.2% M/M); building permits final for May (prev. 4.4% M/M); current account for Q1 (prev. USD -190.7bln); Canada preliminary May manufacturing sales due.
• CENTRAL BANKS: Fed Bank Stress Tests are due after the US close. The ECB Economic Bulletin pre-release assessing the growth headwinds from higher oil prices amid the Middle East war; ECB Convergence Report for 2026 is also due to be published. BoC and Riksbank will publish meeting minutes. Today’s speakers slate include: Fed Governor Cook (voter) will give pre-recorded opening remarks. BoE’s Dhingra (dove) will speak on geopolitical shocks and clean energy (text expected), BoE’s Breeden (neutral) will give remarks on infrastructure; BoC’s Rogers speaks on infrastructure (text expected). RBA’s Hauser and ECB’s Cipollone are also due.
• SUPPLY: US auctions USD 70bln of 5yr notes and USD 28bln of 2yr FRNs; UK auctions GBP 4.25bln of 2031 debt; Germany auctions EUR 2bln across 2037 and 2047 lines; Italy auctions EUR 2–2.5bln of 2028 BTPs, and EUR 1.5–1.75bln of 2039 BTPei.
• ENERGY: DoE weekly energy inventories are due; data released by the API afterhours on Tuesday showed headline crude stocks posting a smaller than expected draw of -0.8mln bbls (exp. -5.0mln), Cushing stocks drew down by -1.0mln bbls, distillates posted a surprise build of +1.4mln bbls (exp. -0.4mln), and gasoline also saw a surprise build of +1.2mln bbls (exp. -0.4mln).
• EARNINGS: Notable US corporates reporting today include: Micron (MU), Paychex (PAYX), Jefferies (JEF).