EUROPEAN OPEN: SHEL LN chemicals assets draw bids; GSK LN gets priority review and Japan approval; BAYN GY sevabertinib approved in Japan; BNP FP confident in Sudan litigation; NVDA raises AI server prices by 15%+

EUROPEAN OPEN:

• European equities start the week mostly lower; tech underperforms, travel & leisure leads. Overnight, APAC stocks were mixed but with a mostly negative bias amid US-Canada trade tensions and quiet weekend of geopolitical updates. Chinese tech stocks fell as Alibaba’s HKD 80bln share sale and Yangtze Memory Technologies’ planned IPO raised supply and dilution concerns, as investors question returns on heavy AI spending.
• Gold rose to a three-month high as US Treasury bond buyback intervention revived concerns over USD debasement and boosted demand for alternatives. Bullion has climbed to around USD 4,650/oz after gains of more than 5% last week, and gold-backed ETFs saw their strongest weekly inflows since January.
• Treasury Secretary Bessent will announce a new fiscal consolidation initiative, expected early this week; he has also signalled a readiness to expand liquidity support bond-buybacks at the long-end of the curve beyond the planned USD 4bln per operation.
• Crude futures fell overnight, ahead of expected US economic measures on Iran to be announced later today by Bessent. Bessent wrote in FT that economic D-Day is coming for Iran, and countries that think appeasement of the regime is a safer choice should reconsider. There is speculation that the measures may target buyers of Iranian oil, particularly China. Brent is trading a little above USD 91/bbl, while WTI is around USD 85.50/bbl.
• Italy extended its diesel tax cut through Wednesday as PM Meloni faces pressure from elevated fuel prices linked to the Middle East war. The government had reduced diesel prices by EUR 0.17/litre in July, while the opposition is calling for broader support and a windfall tax on energy companies.
• Hungary plans to restore its Paks nuclear plant to full 2,000-megawatt output by Wednesday after Danube river levels improved; two of three shut reactors restarted over the weekend, lifting output above half capacity.
• In ECB-speak, ECB’s Cipollone said monetary policy needs to remain well calibrated, while inflation is far from adverse or severe scenarios; he added there are no signs pointing to stagflation.
• In terms of the week ahead, in addition to the Iran sanctions set to be announced today, markets are also awaiting a fiscal update from Treasury secretary Bessent, which is expected ‘early’ this week; the Jackson Hole Symposium runs from 27-29th August, featuring a keynote address from Chair Warsh on Friday; US PCE inflation data is also due this week. Major earnings updates this week include NVDA, MRVL, CRWD, CRM.

STOCK SPECIFICS:

• ENERGY: Shell (SHEL LN) has drawn interest from ExxonMobil (XOM), LyondellBasell (LYB), Apollo (APO) and Kuwait Petroleum Corporation for US chemicals assets that could fetch up to USD 8bln, FT reports. Indicative bids cover the whole business or parts, including the Monaca complex, and comes as Shell reduces its chemicals exposure to refocus on core oil and gas operations. ExxonMobil (XOM) temporarily suspended operations at Guyana’s Liza Unity FPSO (produces around 250K BPD from the Stabroek Block) after a small laundry-room fire; operations will resume after safety checks.
• HEALTHCARE: FDA accepted GSK’s (GSK LN) priority review for Jemperli in dMMR/MSI-H locally advanced rectal cancer, with a PDUFA date in February 2027; separately, Japan approved Hibsago for chronic hepatitis B, marking its first global approval. Bayer’s (BAYN GY) sevabertinib received approval within Japan for those with Her-2 Mutant non-Small Cell Lung Cancer.
• FINANCIALS: BNP Paribas (BNP FP) is confident the trial court fundamentally misconstrued Swiss law in the Sudan litigation; it also alleged numerous legal errors, and said relevant evidence showing the transactions were authorised under Swiss and European law had been sidelined. Partners Group (PGHN SW) agreed to exit its investment in Taiwanese bubble tea maker Gong cha following Bain Capital’s acquisition, Reuters reports.
• INDUSTRIALS: Saudi Arabia has reportedly held talks with London brokers about a potential state-backed scheme providing risk insurance for ships operating in the region.
• CONSUMER CYCLICAL: Amazon’s (AMZN) Zoox has begun charging for driverless robotaxi rides in Las Vegas, and operating in San Francisco; Zoox plans to expand testing and service to Austin and Miami. * Alibaba (BABA) priced a HKD 80bln placement of 710mln new shares at HKD 112.70 each; transaction expected to close on 26th August; Alibaba plans to use the proceeds to expand its full-stack AI capabilities and infrastructure.
• TECH: Nvidia (NVDA) customers have been notified of price increases of more than 15% on AI servers, effective on systems shipped early next year, covering flagship Vera Rubin and Grace Blackwell chip configurations. China’s Yangtze Memory Technologies Corp plans to raise USD 4.9bln in a Shanghai IPO to expand production and develop next-gen storage products, WSJ reports; the expectation is for YMTC to list in 2027.
• NOTABLE BROKER UPDATES: Sandvik (SAND SS) upgraded at SEB; Diploma (DPLM LN) upgraded at JPMorgan; Segro (SGRO LN) upgraded at Barclays. Big Yellow (BYG LN) downgraded at Barclays; Unite (UTG LN) downgraded at Barclays

DAY AHEAD:

• EVENTS: US Treasury Secretary Bessent holds a press conference on Iranian economic sanctions. The Coalition of the Willing meeting takes place in Ukraine; Witkoff and Kushner are reportedly no longer expected to attend.
• DATA: In North America, US Chicago Fed National Activity Index (exp. 0.1, prev. -0.02); Mexico mid-month CPI for August (headline prev. 0.07% M/M and 3.1% Y/Y; core prev. 0.16% M/M and 3.95% Y/Y).
• CENTRAL BANKS: Norges Bank’s Bache delivers the Schweigaard Lecture; Riksbank’s Bunge speaks on the future of private capital markets.
• EARNINGS: Notable corporates reporting today include: PDD Holdings (PDD), XPeng (XPEV).
• SUPPLY: US Treasury announces 5yr and 7yr liquidity support buybacks.
• WEEK AHEAD: Treasury Secretary Bessent will announce a new fiscal consolidation initiative, last week indicating that the announcement could be late last week/early this week; he also signalled a readiness to expand liquidity bond buybacks at the long-end of the curve beyond the planned USD 4bln per operation. Elsewhere this week, US PCE, BLS revisions, Bessent on Iran, and Jackson Hole are on the docket. On the earnings front, highlights include NVDA, MRVL, CRWD, CRM.