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EUROPEAN OPEN: VOW3 GY approves Future Plan 2030; BAS GY sues AAPL over Face ID patents; ECB authorises BMPS IM-MB IM merger; STLAM IM reportedly accelerates Huawei-JAC alliance in China; Fitch affirms ASML NA

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UK Energy Secretary could recommend new North Sea drilling as soon as next week, a Rosebank oilfield announcement expected to follow, The Guardian reports, citing sources

Chrysler (STLAM IM/STLAP FP) is recalling some 240k vehicles, NHTSA reports

EUROPEAN OPEN: VOW3 GY approves Future Plan 2030; BAS GY sues AAPL over Face ID patents; ECB authorises BMPS IM-MB IM merger; STLAM IM reportedly accelerates Huawei-JAC alliance in China; Fitch affirms ASML NA

Russia launched a large-scale missile and drone attack on energy infrastructure in Ukraine’s Odesa region, Al Arabiya reports

European Movers: Volkswagen (VOW3 GY) +8%, Vodafone (VOD LN) +2%, Glencore (GLEN LN) -0.9%, Vivendi (VIV FP) -5%

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EUROPEAN OPEN

  • European equities start the last trading day of the week cautiously; on the week, futures of both the broad Stoxx 600 and narrower Euro Stoxx 50 are primed for losses, following small gains last week. APAC stocks took impetus from positive global risk sentiment on Wall Street, and lower yields after Fed’s Waller kept a September rate hold in play, and following no major new geopolitical developments, as participants look ahead to the key US jobs data later today.
  • The Dollar Index is on track for a weekly decline after hitting its lowest since May; traders now see roughly even odds of a Fed rate hike on 16th September (vs 70% earlier in the week), following comments from Fed Governor Waller on Thursday. The JPY has gained almost 3% this week, supported by expectations of a possible BoJ rate hike this month; overnight, analysts at Nomura said a 25bps BoJ hike in September looks reasonable, with further increases possible in October and December if JPY weakness persists toward 160 per dollar; Nomura’s baseline is at least one rate increase per quarter, and it sees scope for the JPY to strengthen beyond 150 if policy signals support further tightening. Gold steadied near USD 4,470/oz after rising more than 2% on Thursday as Fed rate hike bets unwound. Crude futures are headed for their biggest weekly gain since July as renewed US-Iran hostilities raised concerns over Strait of Hormuz disruptions. November Brent traded around USD 96/bbl, up more than 7% for the week, while October WTI was near USD 91/bbl. Reports note that some Persian Gulf crude shipments continue; ADNOC appears to be continuing LNG loadings at its Das Island export facility despite Strait of Hormuz risks, according to Bloomberg. Satellite imagery showed a tanker docked on 2nd September, while linked vessels have reportedly switched off transponders when travelling through the Strait. Additionally, Saudi Arabia kept October Arab Light pricing unchanged.
  • Of note for global bonds, Norges Bank Investment Management has proposed cutting government bonds to 50% of its bond portfolio (from 70%); the change could reduce US Treasury holdings by about USD 80bln, and global government bonds by roughly USD 106bln, FT reports. Norges Bank also proposed market-value weighting instead of GDP weighting. Elsewhere, Reuters reports that Chinese banks have been buying US Treasuries after raising dollar deposit rates; the shift reflects low Chinese government bond yields and demand for more profitable safe assets.
  • In central bank speak, BoE chief economist Pill warned that governments seeking central bank financing for large fiscal deficits could threaten monetary policy independence. Pill called this the defining challenge facing central banks, citing weak growth, supply shocks, larger deficits and higher public debt. He also warned that the UK economy’s non-inflationary growth capacity has fallen.
  • In trade news, USTR Greer warned that UK alignment with the EU rather than the US is an issue for any US trade deal, FT reports. Greer added that the UK had not taken full advantage of Brexit, had aligned with EU-made rules that restricted US goods, and continued to maintain relatively high tariffs.

STOCK SPECIFICS

  • TECH: Fitch affirmed ASML (ASML NA) credit ratings at ‘A+’; outlook stable. The CRA cited its critical position in semiconductor lithography, unrivalled technological leadership in advanced EUV tools, and a supportive semiconductor industry outlook.
  • COMMUNICATIONS: Vivendi (VIV FP) H1 2026 revenue EUR 140mln, EBITA EUR 4mln, and EBIT EUR -10mln; its investment portfolio fell to EUR 5.1bln at end-June (from EUR 5.9bln at end-2025), largely due to Universal Music Group (UMG NA), whose stake value declined to EUR 3.3bln (from EUR 4.0bln). Of note for Deutsche Telekom (DTE GY), T-Mobile US (TMUS) announced that Jessica Uhl will join as CFO Designate in mid-September, and succeed Peter Osvaldik as CFO in February 2027; T-Mobile also reaffirmed its FY26 guidance, capital return programme and long-term financial framework.
  • CONSUMER CYCLICALS: Volkswagen (VOW3 GY) approved Future Plan 2030, including another 50K job cuts and investment of EUR 135bln between 2027-31l it targets a 9% operating margin by 2030, corresponding to operating profit of around EUR 31bln, while planning a three-figure billion investment sum to strengthen its brands and competitiveness. Stellantis (STLAM IM) is reportedly accelerating its alliance with Huawei and JAC in China as part of a relaunch plan that includes the Maextro brand; no agreement has yet been signed. TUI (TUI1 GY) affirms FY26 guidance, sees underlying EBIT between EUR 1.1-1.4bln. Lululemon (LULU) slid by almost 20% in extended US trading after revenue missed expectations, comparable sales declined, and the company sharply cut its Q3 and FY outlooks, citing weaker North American demand, inconsistent product response and a slow start to the current quarter.
  • MATERIALS: BASF (BAS GY) sued Apple (AAPL) in the US, alleging that Face ID in various iPhone and iPad models infringes seven patents held by its trinamiX unit. BASF seeks unspecified damages, and an end to further alleged infringement. Of note for fertiliser and seeds producers, Senator Chuck Grassley asked President Trump to pressure US seed, fertiliser and chemical companies over lower overseas prices, particularly in Brazil; Grassley said US farmers pay a 68% premium for corn seed vs Brazil, and argued action could reduce the need for USD 11bln in bridge support.
  • FINANCIALS: The ECB has authorised Monte Paschi’s (BMPS IM) merger by absorption of Mediobanca (MB IM) and related corporate reorganisation measures, Il Sole reports; MPS shareholders may vote on the merger on 29th October alongside offers for Banca Generali (BGN IM) and Banco BPM (BAMI IM).
  • HEALTHCARE: Roche (ROP SW) plans to deploy a LightCycler diagnostic system in Bunia, DRC, with technical support and training. Of note for Sandoz (SDZ SW) and Bayer (BAYN GY), the US FDA is working with manufacturers to increase supplies of estradiol transdermal patches after reports of patient access difficulties.
  • NOTABLE BROKER UPDATES: Goldman Sachs downgrades Telenor (TEL NO) and Elisa (ELISA FH), upgrades Neste (NESTE FH) and Vodafone (VOD LN). Morgan Stanley upgrades Accor (AC FP) and Shell (SHEL LN), downgrades JD Wetherspoon (JDW LN) and Kuehne+Nagel (KNIN SW). Glencore (GLEN LN) downgraded at Freedom Capital. Barclays initiates Gaztransport (GTT FP) with an Overweight, and Yara International (YAR NO) with an Underweight. Pets at Home (PETS LN) initiated with Buy at Shore Capital.

DAY AHEAD

  • DATA: Eurozone retail sales are seen rising 0.3% M/M (prev. -0.3%), and to 0.9% Y/Y (prev. 0.7%); August construction PMIs are due across the Eurozone (prev. 44.3), UK (prev. 44.7), Germany (prev. 42.1), France (prev. 41.5) and Italy (prev. 49.1). In North America, US August nonfarm payrolls are the key release (preview below); Canada will also release employment stats, with 15K jobs expected to be added in August (prev. 75.1K) with the unemployment rate unchanged at 6.4%; the Canadian Ivey PMI is also due (exp. 56.2, prev. 55.1).
  • CENTRAL BANKS: BoE Governor Bailey delivers a keynote (text released); BoE will also publish its August Decision Maker Panel survey. ECB chief economist Lane (dovish) delivers a keynote (slides released).
  • CRA: Potential reviews are due from Scope Ratings on Germany (AAA).
  • ENERGY: Baker Hughes reports weekly rig counts (prev. oil 447, gas 132, total 588).
  • PREVIEW - US NONFARM PAYROLLS (13:30BST/08:30EDT): The consensus expects the US economy to have added 58K nonfarm payrolls in August, rebounding from July’s 23K decline, with the unemployment rate seen holding steady at 4.1%. Average hourly earnings are forecast to pick up, rising by 0.3% M/M, while the average workweek is expected to edge up to 34.4 hours. Labour market proxies have been mixed in August: claims data softened slightly during the survey window, ADP’s private payrolls data undershot expectations, and Revelio also pointed to cooling hiring in the month, while Challenger reported a rise in August job-cut announcements, despite stronger hiring plans. Business surveys were similarly mixed, with the ISM manufacturing employment index remaining in expansion but slowing, while ISM services employment stayed in contraction; in contrast, S&P Global’s surveys showed hiring strengthening across both manufacturing and services. Consumer confidence data showed an improvement in the labour market differential, although expectations for jobs six months ahead deteriorated. Analysts note that the August data may also be impacted by the expiry of Temporary Protected Status for some workers, which could mechanically weigh on payrolls. In terms of Fed policy, analysts say that a payrolls print close to expectations alongside a steady unemployment rate would be consistent with a stable labour market that is cooling but not deteriorating sharply, and that should keep policymakers focused on the inflation side of the mandate. Full preview is available in the Newsquawk research suite.

Context

This is the standard European open digest ahead of US payrolls, and the session structure follows the usual pattern: thin conviction in the morning, positioning held light until the US labour print, with rate expectations the dominant macro driver. The framing here is unusual in one respect, in that the market debate is around Fed hikes rather than cuts, a configuration last seen in earnest tightening phases, where hawkish repricing has historically been dollar positive and front-end led; comments from individual governors have typically moved pricing only when they reflect the committee's centre rather than its hawkish tail. The crude complex is the other live channel: geopolitical premia built on Strait of Hormuz risk have in past episodes proven durable while physical flows are visibly disrupted and quick to bleed when loadings continue, which makes shipping and insurance behaviour, not headline noise, the tell. The Norwegian sovereign fund's proposed cut to government bond holdings is a structural flow story rather than a day one, but reallocations of that scale tend to be flagged well in advance and executed gradually. On the single-stock side, the MPS-Mediobanca authorisation is the latest step in Italian banking consolidation, a process that has historically run through shareholder votes and regulator sign-offs before any capital markets read-through. The immediate calendar hinge is payrolls and the reaction function it implies for the September Fed meeting.

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