EUROPEAN OPEN: SHEL LN to acquire Angola blocks from CVX; TKA GY could sell TKSE to Jindal; RKT LN special dividend; ALC SW terminates merger with STAA; ORSTED DC sues US over Sunrise Wind construction halt; EZ inflation, US ADP jobs and JOLTS ahead

• EUROPEAN OPEN: European equities have opened mixed, following a mixed APAC session where momentum began to wane despite the fresh record levels on Wall Street. The Hang Seng and Shanghai Comp were pressured by losses in energy names and tech stocks following a decline in oil prices, and with platform names hit on an announcement of management measures for online platforms. Still, Bloomberg notes that China’s stock trading volume has risen to a four-month high, indicating that the early-2026 equity rally may continue; Goldman Sachs said it sees +20% gains for Chinese stocks this year. Asian rare earth stocks rose after China banned exports of military-use items to Japan on Tuesday, with Toyo Engineering, Daiichi Kigenso, Lynas Rare Earths and Australian Strategic Materials posting sharp gains; analysts have said that Japan’s auto and electronics sectors face supply-chain risks after China signalled tighter rare-earth export curbs, potentially affecting over 40% of shipments. Iron ore prices reached the highest since February, supported by expectations of macroeconomic support in China and pre-holiday restocking; futures rose for a fourth day, topping USD 108/ton in Singapore, after the PBoC said it would flexibly use multiple policy tools, including interest-rate cuts, though did not offer any timetable. However, Nickel prices fell from a 19-month high as the recent base-metals rally paused; recent gains have been driven by output risks in Indonesia and strong investment flows into China’s metals markets. Gold fell as traders continued to switch focus away from the geopolitical risks and towards upcoming US economic data; bullion traded near USD 4,470/oz, having rallied by more than 4% over the last three sessions. Crude prices fell as Washington sought greater control over Venezuela’s oil industry, after US President Trump said Venezuela would hand over up to 50mln bbls of crude to the US; the oil will be sold at market price, with proceeds controlled by the President to benefit both countries. Brent slid toward USD 60/bbl, while WTI traded near USD 56/bbl. Trump plans to meet Chevron (CVX), ConocoPhillips (COP), Exxon (XOM) and other US oil producers at the White House on Friday to discuss major investments in Venezuela’s oil sector, with Trump stating that US companies would invest billions. In fixed income, Treasury yields are slightly lower. Traders in US Treasury options are increasing bets that 10yr yields will break out of a narrow range and fall below 4% in coming weeks, reaching levels last seen in November, Bloomberg reports. The bullish positioning has built since late December as investors await key economic data delayed by the government shutdown. Bloomberg also noted that a record block trade was placed in US federal funds futures on Tuesday ahead of key US labour data; the January contracts trade totalled 200k, the largest ever confirmed by CME Group, and stood out in an otherwise calm market at the start of the year. The Day Ahead includes Eurozone inflation data, US ADP and JOLTS job figures, ISM Services PMI, remarks from Fed's Bowman (voter, dove).
• STOCK SPECIFICS: In energy, Shell (SHEL LN) agreed to acquire a 35% stake in two offshore Angola oil blocks from a Chevron (CVX) subsidiary; terms were not disclosed. In industrials, at CES, Siemens AG (SIE GY) chief Busch said the company sees potential acquisitions in AI, life sciences and operations software, Bloomberg reports; he cited Siemens’ USD 5.1bln purchase of Dotmatics as supporting AI-driven drug development. In materials, Thyssenkrupp (TKA GY) could sell its steel division TKSE to Jindal Steel International in phases, with an initial 60% stake followed by the remainder, Reuters reports; Jindal has conducted due diligence since October. The phased deal could help address about EUR 2.5bln in pension liabilities. In tech, Nvidia (NVDA) CEO said that Chinese demand for the company’s H200 AI processors is quite high, after the US granted approval to sell the chips in China; he added that supply chains are active and licensing details with the US government are being finalised. In consumer sectors, Reckitt (RKT LN) announced a special dividend following the divestment of its Essential Home unit; intends to return approximately GBP 1.6bln of excess capital to shareholders. In healthcare, Alcon (ALC SW) terminated its definitive merger agreement with Staar Surgical (STAA); CEO said Alcon remained disciplined on price and risk, its refractive strategy is unchanged, and focus remains on WaveLight Plus and global launches of more than 10 products across surgical and vision care. GSK (GSK LN) announced positive results from B-Well 1 and B-Well 2 phase III trials for bepirovirsen, a potential first-in-class treatment for chronic hepatitis B; primary endpoint was met in both trials, and global regulatory filings are planned from Q1. In utilities, Orsted (ORSTED DC) filed a federal court complaint in Washington seeking a preliminary injunction against the Trump administration and the US Interior Department after a 22nd December order imposed a 90-day halt on construction of its Sunrise Wind offshore project near New York and four other wind farms off Long Island.

TODAY'S AGENDA:

• DAY AHEAD: There are notable US labour market data due ahead of Friday's official employment situation report; ADP's gauge of nonfarm employment is expected to print 49K in December vs -32K in November (the November report noted that median change in annual pay for job stayers fell to 4.4% Y/Y from 4.5%, and for job changers fell to 6.3% Y/Y from 6.7%). JOLTS job openings are expected to fall to 7.61mln in November (prev. 7.67mln in October); in that October report, the quits rate fell to 1.8% from 2.0%, while the vacancy rate was unchanged at 4.6%. Elsewhere, the ISM Services PMI is seen inching down a little in December (see preview below). In Europe, December construction PMI metrics are due. Germany's jobless rate is expected to be unchanged at 6.3% in December. On the inflation front, Eurozone HICP is seen cooling in December (preview below). On the speakers' slate, Fed's Bowman (voter, dovish) will speak at a California Bankers Association seminar. Today's supply comes by way of a UK sale of GBP 4.25bln 2031 debt, while Germany will sell EUR 6bln of Bunds. On the energy front, API weekly energy inventory data reportedly showed headline crude stocks posting a surprise draw of -2.8mln bbls (exp. +0.5mln), Cushing building by +0.7mln bbls, distillate seeing a larger than expected build of +4.9mln bbls (exp. +2.1mln), and gasoline stocks also seeing a larger than expected build of +4.4mln bbls (exp. +3.2mln). The more widely followed DoE weekly inventory report will be released later today. After the US close, Jefferies (JEF) will publish its earnings report afterhours today, which will help traders to gauge the trends ahead of the start earnings season next week, where major US banks will report; Constellation Brands (STZ) will also report after the close.
• PREVIEW - EUROZONE INFLATION (10:00GMT/05:00EST): Eurozone HICP is expected to ease to 2.0% Y/Y in December (prev. 2.1%), with the core rate seen unchanged at 2.4% Y/Y. Heading into the data, France’s December CPI rose 0.8% Y/Y and HICP 0.7%, down from November levels, as energy prices fell, and food prices rose more quickly; German headline inflation fell to 1.8% Y/Y in December from 2.3%, while the harmonised measure dropped to 2.0% Y/Y from 2.6%, with the core rate at 2.4% from 2.7%. Writing last week, analysts at Investec expect Eurozone inflation to remain in a “good place”, and is in line with the consensus view for the December release. The firm said disinflation is expected to be driven primarily by lower fuel prices, alongside a partial unwind of November’s softness in non-energy goods and firmness in services. That said, services inflation will remain closely watched by the ECB given firmer-than-expected wage growth, while authorities are also monitoring potential trade diversion effects from Chinese exports, which have so far had a limited impact on consumer prices.
• PREVIEW - ISM SERVICES PMI (15:00GMT/10:00EST): The ISM services PMI headline is seen easing to 52.2 in December from 52.6. As a basis of comparison, S&P Global's flash PMI data for December showed services activity expanding in December but at a notably slower pace. The business activity index fell to a six-month low, with growth in new business slipping to its weakest in 20 months, pointing to cooling demand across the sector. Employment growth nearly stalled as firms became more cautious. The outlook remains positive but has deteriorated slightly, sitting below the long-run average, S&P said. Rising input costs and sharply higher prices charged—partly blamed on tariffs and labour costs—are eroding confidence, although hopes of policy support and lower interest rates provide some offset.