EUROPEAN OPEN: MC FP sales rise as US demand offsets Iran impact; BARC LN profits jump on strong trading; ULVR LN raises outlook after sales pick-up; MBG GY cuts guidance on weaker China; SAF FP raises guidance on civil engine demand

EUROPEAN OPEN: European equities start Tuesday trading with slight gains, amid a heavy corporate earnings slate (see below), and despite sharp downside in overnight trading. APAC stocks fell towards a technical correction as semi stock selling intensified; the MSCI Asia Pacific Index drop has taken losses vs its June peak to beyond 10%; tech shares are once again coming under pressure, driven by fears over crowded AI positioning and valuation durability, while Nvidia’s AI deals announced this week, as well concerns around Chinese competition, after yesterday’s reports that China had started DUV tool production, and as the CXMT IPO poses a competitive threat to memory makers, are also said to be weighing. Brent for October delivery continues lower, trading around USD 85.50/bbl as Europe enters, extending its decline as optimism over US-Iran talks grows. President Trump said that the US paused strikes to allow negotiations, talks with Iran are under way, and there is a good chance of a deal, though he warned strikes would resume if negotiations fail. Elsewhere, Iran and Oman continued talks on restarting Strait of Hormuz; Oman presented a proposal for a joint regional mechanism to manage the Straits involving voluntary fees, and the proposal suggests that Iran would not exercise sole control of the waterway. Gold prices slumped, and starts the European day around USD 4,050/oz, while Bitcoin fell to its lowest in 11 days as investors weighed possible tighter US monetary policy, ahead of the FOMC meeting on Wednesday. Money markets are pricing around a one-third chance of a hike, but some sell side desks have recently issued hawkish notes looking for a hike; Citadel Securities expects the Fed to raise rates by 25bps this week, arguing that a surprise rate increase would reinforce Fed Chair Warsh’s commitment to fighting inflation. In data, BRC reported that UK food inflation eased to 2.2% Y/Y in July (vs 2.4% in June), while overall shop-price inflation fell to 0.9% Y/Y, and fresh-food inflation rose to 3.1% Y/Y (from 2.8%). The BoE will meet this week, with markets pricing one 25bps rate hike by the end of this year, with a little above 50% chance of a second. STOCK SPECIFICS: CONSUMER: LVMH (MC FP) reported Q2 revenue 19.52bln (exp. 19.45bln), fashion and leather goods revenue 8.69bln (exp. 8.97bln); H1 profit from recurring operations 8.69bln (exp. 8.45bln); H1 net income group share 5.70bln (exp. 5.22bln); US sales rose 6%, driven by AI and technology wealth, while Europe was flat as the Iran war weighed on tourism. Watches and jewellery led growth with organic sales up 11%. Unilever (ULVR LN) reported Q2 revenue of EUR 13.1bln (exp. 12.9bln), with underlying sales growth of 5.8% (exp. 4.1%); it lifted its FY 2026 outlook, and sees FY underlying sales growth of 4-6%, with around 3% volume growth, H2 underlying sales growth of 4-5% led by pricing, and a modest improvement in underlying operating margin. Mercedes-Benz (MBG) lowered FY group revenue guidance, citing weaker Chinese demand, and it also reduced its revenue outlook after weaker-than-expected deliveries. Michelin (ML FP) reported H1 adj. EBIT of EUR 1.45bln (exp. 1.4bln), adj. EBITDA of EUR 2.42bln (exp. 2.31bln), and sales of EUR 12.7bln (exp. 12.9bln); FY guidance was affirmed despite the uncertain environment. FINANCIALS: Barclays (BARC LN) reported Q2 revenue of GBP 8.34bln (prev. 7.19bln), PBT of GBP 3.25bln (exp. 3.12bln), FICC revenue of GBP 1.47bln (exp. 1.51bln), Investment Bank Revenue of GBP 3.96bln (exp. 3.66bln); CET1 came in at 14.3% (vs guidance for 13-14%); execs said it is on track with its 2026 and 2028 targets, and announced a GBP 1bln share buyback. COMMUNICATIONS: Orange (ORA FP) H1 revenue EUR 20.9bln (exp. 20.7bln), adj. net income of EUR 1.35bln, with growth led by Africa and Middle East at +13.9%, Europe-core at +4.1% and France at +1.2%. FY EBITDAaL guidance was raised to above 4% (prev. above 3%), and Organic Cash Flow guidance was lifted to EUR 4.3bln (prev. EUR 4bln), driven by operating performance and MasOrange consolidation. INDUSTRIALS: Safran (SAF FP) raised FY recurring operating profit guidance to EUR 6.4-6.5bln (prev. saw 6.1-6.2bln), and increased revenue growth and free cash flow targets. H1 adj. operating margin reached 18.4% (exp. 17.7%), while LEAP engine deliveries rose 41% to 1,030, and M88 deliveries more than tripled to 33. HEALTHCARE: Phillips (PHIA NA) reported Q2 adj. EBITA margin of 16.4% (exp. 11.9%), boosted by a 4.2% US tariff refund benefit, with comparable sales growth of 4% (exp. 3.8%); FY adj. EBITA margin guidance was raised to 13.5-14.0% (prev. 12.5-13.0%), including a c.1% tariff refund benefit, and free cash flow guidance was lifted to EUR 1.5-1.7bln (prev. EUR 1.3-1.5bln). NOTABLE BROKER UPDATES: Admiral (ADM LN) upgraded at Citi; K+S (SDF GY) upgraded at BNP. Fresenius Medical (FME GY) downgraded at BNP Paribas; Veolia (VIE FP) downgraded at Morgan Stanley; Swiss Re (SREN SW) downgraded at JPMorgan. DAY AHEAD: EVENTS: US President Trump will meet Ukraine President Zelensky, and Israel’s PM Netanyahu. DATA: In North America, weekly ADP employment metrics are also due (prev. 16.5K); US consumer confidence is seen at 92.2 (prev. 91.2); the advance goods trade balance is seen narrowing slightly to USD -101.3bln (prev. USD -105.9bln), wholesale inventories is expected to rise 0.2% M/M (prev. 0.1%), and retail inventories ex-autos at 0.3% M/M (prev. 0.3%); Richmond Fed manufacturing index is seen picking up to 10 (prev. 4); S&P/Case-Shiller and FHFA home price data is due. After today’s economic releases, the Atlanta Fed will update its GDPNow tracking data for Q2, ahead of this week’s GDP report (yesterday it was revised down to 1.6%). CENTRAL BANKS: The Bundesbank will publish its July monthly report. SUPPLY: US auctions USD 44bln of 7-year notes; UK auctions GBP 1.5bln of 2028 and 2040 debt via tender; Italy sells EUR 2.0-2.5bln of and 2028 BTPs, and EUR 2.5-3.0bln of 2037 BTPei; Netherlands auctions EUR 2-3bln of 2036 DSLs. ENERGY: After the close, the API will report weekly energy inventories. EARNINGS: Notable US corporates reporting today include: Visa (V), Coca-Cola (KO), KLA (KLAC), Seagate (STX), Boeing (BA), Corning (GLW), S&P Global (SPGI), UPS (UPS), Waste Management (WM), Illinois Tool Works (ITW), Mondelez (MDLZ), American Tower (AMT), Sherwin-Williams (SHW), Royal Caribbean (RCL), Ecolab (ECL), Hilton (HLT), NXP Semiconductors (NXPI), PACCAR (PCAR), Bloom Energy (BE), Teradyne (TER), Carrier Global (CARR), Ford (F), PayPal (PYPL). OPTION EXPIRIES: Gold, silver and copper August 2026 options expire; Brent September 2026 options expire.