EUROPEAN OPEN: AIR FP mulls sale of US space unit; ALV GY weighs GBP 5bln AA takeover; 4VK GY nears USD 17bln USI Insurance deal; INPST NA cuts EBITDA guidance; UK weighs windfall tax on banks, oil majors; GLEN LN takes USD 480mln Radiant World provision

EUROPEAN OPEN: Global stocks have started the week on the downside following a resumption of US-Iran strikes, and Fed Chair Warsh’s hawkish comments on Friday, which have lifted the probability of a Fed September rate hike. CME data suggests markets are pricing around 60% probability of a Fed rate hike at the September confab (vs around 43% prior to Warsh’s remarks). Gold continued its decline following Friday’s remarks from Fed Chair Warsh, who reiterated his commitment to returning inflation to 2%; bullion traded around USD 4,430/oz after losses of more than 3% on Friday. Still, Bloomberg notes that gold traders have been increasingly using call spreads and exotic options to bet on further gains as US Treasury bond-buying plans pressure the buck; investors have also been returning to SPDR Gold Shares ETF. The Dollar Index is a touch lower after Friday’s gains. Crude futures rose as Middle East fighting intensified, and the US signalled further economic pressure on Iran to come. The US and Iran exchanged strikes for the first time in about a month; US forces hit Iranian rocket launchers allegedly preparing to deploy mines into the Strait of Hormuz, while Iran responded with missiles toward Jordan. CENTCOM said it remains prepared to protect commercial shipping through the waterway. Treasury Secretary Scott Bessent also said new secondary sanctions on Iran could be announced on a weekly basis. Brent prices have topped USD 90/bbl, and WTI is near USD 86/bbl. Russia extended its diesel export ban for producers through 30th September to support domestic fuel supplies amid intensified Ukrainian refinery attacks. The move adds pressure to already-tight global diesel supplies; Goldman Sachs has more than doubled its 2027 diesel refining margin forecasts, citing refinery disruptions from wars in the Middle East and Russia-Ukraine conflict. GS now expects margins over Brent of USD 63/bbl the US, and USD 49/bbl in the EU (prev. saw USD 27 and USD 19, respectively). In data, China’s official manufacturing PMI rose to 49.8 in August (exp. 49.6; prev. 49.2), remaining in contraction, but with new orders and production returning to expansion. The non-manufacturing PMI was unchanged at 49.0 (prev. 49.0), at the weakest level since December 2022, reflecting continued sluggishness in domestic consumption. The analysts said that the divergence underscores China’s ongoing reliance on exports and manufacturing to drive growth. In French politics, Socialist Party leader Olivier Faure joined the race to succeed President Macron at next Spring’s elections; he joins Raphael Glucksmann, Philippe Brun and Segolene Royal among the Socialist contenders, highlighting how France’s left remains divided. Marine Le Pen, Edouard Philippe and Jean-Luc Melenchon currently lead in opinion polls. French PM Lecornu again warned that failure to pass a 2027 budget before next year’s Presidential Election could trigger political and financial instability. Budget talks are due to begin at the end of September amid a divided National Assembly. On Friday, Fitch maintained France’s stable outlook, but warned widening deficits and rising debt could threaten its credit rating. The G20 finance talks begin today, ahead of the leaders’ summit scheduled for 14-15th December. US Treasury Secretary Bessent plans to press G20 members to reassess China trade terms to encourage stronger Chinese domestic demand. German Finance Minister Klingbeil will call for reduced uncertainty from tariff disputes, and the Iran and Ukraine wars, alongside closer cooperation with India, Canada and the UK on open, rules-based trade. In European trade news, Iceland will not resume EU accession talks after 52.8% of voters rejected reopening negotiations; opponents cited concerns over sovereignty, as well as control of fisheries and agriculture. PM Frostadottir said the government would honour the referendum result. Elsewhere, the EU plans to unveil one of its largest Russia sanctions packages in response to hybrid threats, according to Politico; a draft list targets about 1,600 individuals and entities, and is expected to be finalised by the October EU leaders’ meeting. STOCK SPECIFICS: ENERGY: Of note for energy names like Eni (ENI IM) and Shell (SHEL LN), President Trump announced US majority control of more than 65bln barrels of Venezuela’s proven oil reserves via a private sector partnership. The deal aims to expand US access to Venezuelan crude and attract nearly USD 100bln in investment, and will be used to refill the Strategic Petroleum Reserve, which currently holds 289.7mln bbls (about 40% of capacity). Of note for UK financials and energy companies, UK Chancellor Healey is mulling a windfall tax on banks and oil majors in the Autumn Budget, according to The Telegraph. MATERIALS: Glencore (GLEN LN) took a provision of about USD 480mln covering its net exposure to iron ore trader Radiant World; Radiant World owes Glencore USD 951mln, while Glencore owes Radiant World USD 471mln. INDUSTRIALS: Airbus (AIR FP) is reportedly exploring a sale of its US space business as it shifts satellite production towards Europe. The unit generates several hundred million dollars in revenues, and employs more than 200 people. InPost (INPST NA) reported Q2 revenue of PLN 4.18bln (exp. 4.12bln; prev. 3.53bln) and adj. EBITDA of PLN 1.04bln (exp. 1.01bln; prev. 1.0bln); it cut its FY adj. EBITDA guidance, now sees a mid-single digit decline. InPost is currently subject to a EUR 7.8bln takeover bid led by FedEx (FDX) and Advent International. FINANCIALS: Allianz (ALV GY) - Allianz is reportedly considering a GBP 5bln takeover of AA, as its private equity owners weigh a sale or 2027 London listing. Aon (4VK GY) is nearing a roughly USD 17bln deal to acquire USI Insurance from KKR (KKR), according to the WSJ; the acquisition would expand Aon’s capabilities serving midsize businesses and could increase EPS from 2028 onwards. UBS (UBSG SW) could face softer Swiss capital requirements, with an Upper House committee leaning towards requiring 50% CET1 backing for foreign units rather than the government’s proposed 100%. The Swiss government is expected to decide on the rules today, and send a revised banking bill to the Upper House. Of note for German regional banks, Bloomberg warns governance weaknesses and riskier expansion are straining German cooperative banks, with rescues rising. CONSUMER CYCLICAL: Mercedes-Benz (MBG GY) has launched a EUR 1bln buyback. HEALTHCARE: Bayer (BAYN GY) presented first detailed Phase III REVEAL results evaluating investigational PET radiotracer iodine 124 evuzamitide for diagnosing cardiac amyloidosis. NOTABLE BROKER UPDATES: Air Liquide (AI FP) initiated with an Outperform rating at Mizuho; Electrolux (ELUXB SS) re-initiated with Hold rating at SEB. Nordea downgrades Frontline (FRO NO) and Getinge (GETIB SS). DAY AHEAD: EVENTS: The G20 finance talks start on today, ahead of the leaders’ summit scheduled for 14-15th December. President Trump will make an announcement on healthcare at 15:00EDT/20:00BST. UK markets are closed for the Summer Bank Holiday. DATA: In Europe, Germany August CPI prelim is expected to see the headline at 3.0% Y/Y (prev. 2.8%), and HICP at 3.0% Y/Y (prev. 2.8%), with regional state readings releasing through the morning. In North America, the Dallas Fed manufacturing index is due (prev. 1.3). CENTRAL BANKS: Riksbank’s Jansson speaks on the economic situation and the most recent rate decision. SUPPLY: EU auctions EUR 7bln of 2031, 2036 and 2040 debt. WEEK AHEAD: This week’s highlights include: policy announcements from the RBNZ and BoC; US jobs data, US ISM Manufacturing and Services surveys; Eurozone prelim CPI. Notable earnings releases due this week include: AVGO, DELL, PANW.