EUROPEAN OPEN: Trump threatens EU automakers with 25% tariffs; TKA GY and Jindal pause steel stake talks; REC IM takeover draws GBL and CVC interest; GME offers to buy EBAY for USD 56bln; UCB BB acquires IMIDomics patient insight business

• EUROPEAN OPEN: European equities are starting the week flat; overnight liquidity was thinned by Japan and China holidays, as well as the UK Bank Holiday today. Pre-market gains were pared as we approached the open on some punchy rhetoric out of Iran regarding the US proposals to 'guide' ships through the Strait of Hormuz (detailed below). Overnight, EM equities gained, with the MSCI emerging market index rising to a record high as strong tech earnings and hopes for resumed Strait of Hormuz shipping lifted sentiment; South Korean stocks led gains after strong US tech earnings. In FX, the JPY initially rose sharply against the USD in thin Asian trade before retracing most gains, with traders alert to possible further Japanese intervention after Japan likely spent around JPY 5.4tln last week supporting the JPY; Goldman Sachs said Japan has capacity for around 30 more interventions of last week’s scale, describing 160 as policymakers’ “line of defence”. On geopolitics, Iran sent a 14-point proposal via Pakistani seeking a resolution within 30 days, an end to hostilities including in Lebanon, guarantees against military aggression, US troop withdrawal, an end to the naval blockade and sanctions, release of frozen assets, and compensation, with nuclear talks to follow after the war ends. Iranian media said Tehran received a US response via Pakistan, though Washington has not formally confirmed this; President Trump said talks were “going very well”, while Treasury Secretary Bessent said the US was “suffocating” Iran and “sprinting toward the finish line”. On the Strait of Hormuz, Trump said the US would guide stranded vessels out from Monday under “Project Freedom”; US Central Command said 15K personnel, guided-missile destroyers and more than 100 aircraft would be involved, though recently Iran has said that any US interference would violate the ceasefire, and that any foreign armed forces, particularly from the US, would be attacked if they approached and entered the Strait. Oil gained on the remarks, with July Brent trading higher, at around USD 108.50/bbl. OPEC+ agreed to raise June quotas by 188K BPD, though the hike is seen as symbolic as the Iran war disrupts Gulf exports through the Strait of Hormuz. Barclays lifted its 2026 Brent forecast to USD 100/bbl (from USD 85/bbl), citing restricted Hormuz flows, accelerating inventory draws, and offset US builds, with risks skewed higher the longer the disruption persists. Gold fell further as Europe arrive, with bullion trading beneath USD 4,600/oz, while Bitcoin rose above USD 80K for the first time in more than three months, but has pared since. There has been a lot of ECB-speak over the weekend and this morning: ECB’s Muller said rates are at a broadly neutral level, affording the central bank time to wait before taking further action. ECB’s Rehn said monpol must react swiftly should second-round inflation effects materialise, while noting there are currently no obvious signs of such impacts in the near term, with the ECB closely monitoring the situation. ECB’s Stournaras said that recession risk in the Eurozone is real and justified amid Middle East-driven supply disruptions, while noting no significant pass-through of higher energy prices to inflation yet. ECB VP de Guindos will not return to Spanish politics or move to the banking sector when his term ends in May, he said. ECB’s Villeroy said the Eurozone is facing an unprecedented shock, adding that France’s deficit is expected to reach 5% of GDP, though a recession should be avoided. In UK politics, some Labour MPs argued Chancellor Reeves must remain in her role to reassure bond markets, even if PM Starmer is replaced; MPs reportedly fear market turmoil if both were removed simultaneously. Separately, Wes Streeting had reportedly secured backing from more than 81 MPs, the minimum required to trigger a leadership challenge, with some supporters urging him to act soon following the local elections this week. On today’s agenda, nearly 50 European leaders will meet in Armenia to discuss democratic resilience and energy security; the meeting is likely to be overshadowed by Trump’s comments threatening transatlantic relations, after he said he would cut thousands of US troops in Germany and accused European countries of ignoring requests over Iran and the Strait of Hormuz. Meanwhile, there is key data due this week, including US NFP, ISM Services PMI, an RBA policy announcement, Canadian jobs data; earnings will continue with AMD, PLTR, ARM the highlights this week.
• STOCK SPECIFICS: EU Automakers are under pressure after President Trump threatened to raise tariffs on EU car and truck imports to 25% under Section 232 over alleged non-compliance with the US-EU trade agreement; the EU Commission described the threats as “unacceptable” and said it is keeping its options open. In communications, GameStop (GME) is offering to buy eBay (EBAY) for USD 56bln, or at USD 125/shr, with its GameStop’s CEO prepared for a proxy fight, WSJ reports. Manchester United (MANU) secured 2026-27 Champions League qualification after beating Liverpool 3-2 on Sunday, potentially gaining around GBP 100mln+ total revenue uplift for next year. In materials, ThyssenKrupp (TKA GY) and Jindal International Steel paused talks on a ThyssenKrupp Steel stake after sale assumptions changed and ThyssenKrupp advanced its steel realignment. In industrials, Stabilus (STM GY) reported declines in revenue and adj. EBIT in Q2, but confirmed FY guidance. Of note for defence companies, the UK intends to negotiate joining a EUR 90bln EU loan scheme supporting Ukraine. In financials, Swiss lawmakers will meet in Bern today to begin legislative work on UBS Group’s (UBSG SW) future, with an Upper House vote possible in June. Berkshire Hathaway (BRK.B) reported higher Q1 operating profit, continued stock sales, and saw its cash holdings rise to USD 380bln. In healthcare, GBL and CVC Capital Partners are front runners for a potential takeover deal for Recordati (REC IM), Il Sole 24 Ore reports. UCB (UCB BB) on Friday announced the acquisition of IMIDomics’ Patient Insight Business, strengthening its capabilities in immune-mediated inflammatory diseases.

DAY AHEAD:

NOTE: It is a UK Bank Holiday today.

• DATA: In Europe, Eurozone S&P Global Manufacturing PMI Final for April (exp. 52.2, prev. 51.6); Germany final PMI seen at 51.2 (prev. 52.2), France seen at 52.8 (prev. 50.0). Stateside, US factory orders (prev. 0.0% M/M) are due.
• EVENTS: Nearly 50 European leaders will meet in Armenia to discuss democratic resilience and energy security; the meeting is likely to be overshadowed by President Trump’s comments threatening transatlantic relations, after he said he would cut thousands of US troops in Germany and accused European countries of ignoring requests over Iran and the Strait of Hormuz. US President Trump is scheduled to participate in a Small Business Summit today, at 15:00EDT/20:00BST.
• CENTRAL BANKS: The Fed’s Senior Loan Officer Opinion Survey. The ECB publishes its Survey of Professional Forecasters alongside its Economic Bulletin pre-release.
• SPEAKERS: ECB’s de Guindos (dovish; text expected); ECB’s Cipollone will speak on digital assets. Fed’s Williams (voter, neutral) speaks. BoC Governor Macklem and Senior Deputy Governor Rogers appear before lawmakers.
• FIXED INCOME: The US Treasury publishes its quarterly financing estimates ahead of this week’s Quarterly Refunding Announcement; traders will be eying the QRA for any change in debt issuance guidance, looking for any adjustments to language saying note and bond issuance increases are not expected “for at least the next several quarters”, as reliance on bills to fund a near-USD 2tln annual deficit carries risks.
• EARNINGS: Notable corporates reporting today include: Palantir Technologies (PLTR), Vertex Pharmaceuticals (VRTX), Williams Companies (WMB), Diamondback Energy (FANG), ON Semiconductor (ON), Tyson Foods (TSN), Pinnacle West Capital (PNW), Paramount Skydance (PSKY), Pinterest (PINS), Norwegian Cruise Line Holdings (NCLH)
• WEEK AHEAD: Highlights include US NFP, ISM Services PMI, RBA policy announcement, Canadian jobs data. Earnings continue with AMD, PLTR, ARM the highlights this week.