EUROPEAN OPEN: US reportedly approves some NVDA H200 chip sales for China; Sky advances talks for GBP 1.6bln ITV LN unit; TEF SM sales misses, affirms guidance; XPEV explores European factory with VOW3 GY; BRBY LN comps beat as turnaround gains traction

• EUROPEAN OPEN: Global stocks held near record highs as traders eye the China-US summit; US President Trump called the talks “great”; stocks were lifted in European pre-market trade after reports that the US has reportedly approved around 10 Chinese firms to buy Nvidia H200 chips. Reports also note that Xi warned Trump that mishandling Taiwan could lead to “collision or even clashes” and push China-US relations into a dangerous situation, puncturing an otherwise cordial start to Trump’s China visit. Brent has given up overnight gains, falling beneath USD 105/bbl as Europe starts before recovering slightly, with downside attributed to remarks from Iran’s Foreign Minister Araghchi, who told the BRICS summit that Iran does not seek war, though added that Iran is ready to “deliver a crushing and devastating response to foreign aggressors”. Gold is trading slightly firmer, around USD 4,700/oz, after falling on Wednesday amid data showing firming producer prices (which followed upside in CPI data earlier in the week), which accelerated in April at the fastest pace since 2022, reinforcing a higher-for-longer Fed, weighing on bullion. Copper retreated from a record-high close as its rally began deterring purchases in China, snapping an eight-day gain driven by global mine supply risks and expectations of AI-related demand. In politics, UK leadership candidates are considering an early statement that Chancellor Reeves would be retained to support market stability if a longer leadership contest takes place, a Mail on Sunday reporter said citing MPs. In trade, the BCC warned UK manufacturers and construction groups will be hit by significant financial and logistical problems as a result of ministers’ plans to double tariffs on steel imports from July 1st, FT reports.
• DATA: UK GDP rose 0.6% in the three months through March (exp. 0.5%), while the annual rate rose from 1.0% Y/Y to 1.2% Y/Y (exp. 0.7%). Pantheon Macroeconomics said the headline was flattered by front-running of potential supply disruptions and noise in sectors like construction and hospitality, but stressed this should not mask a genuinely solid underlying trend; in terms of the policy implications, Pantheon said that with the economy growing close to its potential rate, spare capacity is unlikely to open up materially, which limits the case for aggressive monetary easing; however, Pantheon’s view that firms and households are treating the Iran War oil shock as temporary suggests the MPC need not panic, and can proceed cautiously rather than react to what may prove transient volatility. Elsewhere, UK RICS House Price Balance fell to -34% in April (exp. -25%; prev. -23%), lowest since November 2023, as more estate agents reported falling house prices as the Iran war and elevated borrowing costs hit buyer confidence; and RICS warned of near-term house price declines amid a challenging global backdrop.

STOCK SPECIFICS:

• TECH: Samsung Electronics (SSNLF) proposed resuming pay talks with its South Korean labour union after government-mediated negotiations collapsed; the Labour Commission called for another mediated round on Saturday to avert an 18-day strike planned from 21st May. Separately, Samsung has reportedly cut production and entered emergency management ahead of a planned strike, according to a report in Money Today; industry sources warned a shutdown could cause KRW 100tln in losses, with over 40k workers said to have applied to strike. The US has reportedly approved around 10 Chinese firms to buy Nvidia (NVDA) H200 chips, according to Reuters; approved buyers reportedly include Alibaba (BABA), ByteDance, Tencent (TCEHY) and JD.com (JD). Cisco (CSCO) shares rose 20% in extended US trading after it beat earnings and revenue expectations, issued stronger-than-expected guidance, highlighted surging AI infrastructure orders despite announcing job cuts. Analysts said Hon Hai’s (HNHPF) Q1 results highlight sustained AI hardware spending; it reported Q1 net profit TWD 49.92bln (exp. 48.88bln), citing strong demand for AI servers; sees Q2 smart consumer electronics and components seeing ‘significant’ Y/Y growth, computing products to be ‘flattish’ Y/Y, and cloud and networking products to see ‘strong’ Y/Y growth; sees FY26 revenue showing ‘strong’ Y/Y growth, maintaining its prior view.
• COMMUNICATIONS: Comcast’s (CMCSA) Sky is reportedly advancing talks to acquire ITV’s (ITV LN) Media and Entertainment unit in a deal partly tied to ITV’s future performance, Reuters reports; the transaction could value the unit at GBP 1.6bln. Telefonica (TEF SM) reported Q1 revenue +0.8% Y/Y at EUR 8.13bln (exp. 8.14bln), supported by service revenue growth and partly offset by lower handset sales; adj. EBITDA +1.8% Y/Y at EUR 2.84bln, operating income of EUR 1.12bln; it affirmed FY26 guidance, and a EUR 0.15/shr cash dividend.
• CONSUMER: Xpeng (XPEV) is in talks with Volkswagen (VOW3 GY) and other automakers about buying a European factory, FT reports; Xpeng exec said the company is exploring whether it can find a European location, and may also consider building a new plant. Burberry (BRBY LN) reported Q4 revenue of GBP 2.42bln (vs 2.46bln Y/Y), and adj. operating profit of GBP 160mln (vs 26mln Y/Y); retail comp sales +5% (exp. 4.6%), which analysts said highlights CEO Schulman’s turnaround is gaining traction, supported by demand for its signature scarves and trench coats; Burberry noted strength in Greater China and the Americas; sees FY27 revenue growth and margin expansion; announced Chair Gerry Murphy will retire in November 2026. Watches of Switzerland (WOSG LN) FY26 revenue +13% Y/Y at GBP 1.82bln, with luxury watch revenue +13%, jewellery revenue +18%; said that demand for key luxury brands remains strong and outstrips supply in the US and UK. Guided FY27 revenue growth of 5-10%, and adj. EBIT margin expansion of 40-80bps.
• INDUSTRIALS: Siemens (SIE GY) agreed to buy several key businesses of Italian rail technology group MERMEC to strengthen its rail portfolio and gain access to Italy, Reuters reports; Terms were not disclosed, though earlier reports suggest the deal could be worth around EUR 1bln.
• UTILITIES: National Grid (NG/ LN) reported FY 2025/26 underlying profit of GBP 5.68bln (vs 5.22bln Y/Y), underlying EPS of GBP 0.78 (vs 0.73 Y/Y), and capital investment of GBP 11.6bln; CEO said performance supports its five-year target of about 10% asset growth and 8-10% underlying EPS growth.
• EX-DIVIDENDS: Going ex-dividends today: Pershing Square (PSH LN), Coca-Cola HBC (CCH LN), Tesco (TSCO LN), BP (BP/ LN), GSK (GSK LN), Unilever (ULVR LN), HSBC (HSBA LN).

DAY AHEAD:

• EVENTS: US President Trump will attend a banquet with China President Xi. It is the Ascension Day holiday in Europe, with markets in Switzerland, Sweden, Norway, Finland, and Denmark shut.
• DATA: In North America, US retail sales are seen rising 0.5% M/M (prev. 1.7%), with the annual rate expected to ease to 3.3% Y/Y (prev. 4.0%); weekly US initial jobless claims are seen ticking up to 205K (prev. 200K) and continuing claims at 1,790K (prev. 1,766K); US export prices are seen rising 1.1% M/M (prev. 1.6%), import prices at 1.0% M/M (prev. 0.8%); elsewhere, March business inventories are due. After today’s data, the Atlanta Fed will update its GDPNow tracking model (currently tracking Q2 growth of 3.7%). Canada’s March wholesale sales data (prev. 2%) will also be released.
• SPEAKERS: Fed’s Miran (voter, dove; outgoing) will give an interview to Bloomberg TV. Fed’s Schmid (2028 voter, hawk) will appear at Kansas City Fed conference; Fed’s Hammack (2026 voter, hawk) will give opening remarks at Cleveland Fed event; Fed’s Williams (voter, neutral) will participate in moderated discussion; Fed’s Bowman (voter, dove) will give opening remarks at a Kansas City Fed event; Fed’s Barr (voter) will give remarks on the Fed’s balance sheet. ECB’s Lagarde (neutral) will appear at an awards ceremony. BoE’s chief economist Pill (hawk) will speak at a roundtable event.
• SUPPLY: US Treasury will announce auction size for next week’s 20yr Bond and 10yr TIPS sale.
• ENERGY: Weekly EIA natgas storage change data is expected to show a build of 86bcf (prev. 63bcf). WTI June 2026 options expire.
• EARNINGS: Notable companies reporting today include: Applied Materials (AMAT).