EUROPEAN OPEN: AZN LN profit beats as oncology drives growth; VOD LN service revenue tops estimates; HSBA LN nears AUD 30bln loan book sale to Blackstone; ARGX NA to buy FBRX for USD 2.2bln; DCC LN to be acquired by KKR and ECP

EUROPEAN OPEN: European equities have started the week on the front foot, as crude prices and the USD fall, and as bonds pick-up after the US and Iran paused further strikes. Gold rose above USD 4,100/oz. September Brent slipped sub-USD 90/bbl as the conflict extends into its fifth month. The US paused strikes against Iran for a second consecutive night while Iran refrained from retaliation and held talks with Oman on the Strait of Hormuz; President Trump said all options remain available, while Oman-Iran discussions on maritime navigation reportedly made some progress. The lower oil prices have also helped to ease inflation concerns ahead of this week’s FOMC policy announcement. Officials face a closely balanced decision as renewed Middle East tensions, higher oil prices, AI-driven demand and new tariffs revive inflation risks, and policymakers remain divided over whether to raise rates now or wait for further inflation and labour market data. Markets have increased expectations of a rate hike, with money markets discounting around 33% probability of a rate rise at the meeting, and are expecting rates to be lifted at least once by the end of the year. There was also focus on the tech sector and AI spending overnight, as China chipmaker CXMT surged by over 500% in its Shanghai debut, while heavyweights like Apple (AAPL), Microsoft (MSFT), Amazon (AMZN) and Meta (META) are set to report earnings this week. Investors are increasingly scrutinising AI-related capital spending; last week, Alphabet increased capex guidance and its negative FCF in Q2 triggered sharp share-price decline, reflecting concerns over AI investment returns. In the UK, PM Burnham ruled out an early general election, saying voters had backed a manifesto that he would honour with parliamentary support, adding that his priority was to focus the UK on restoring effective government and getting the country working. Burnham also said welfare spending must be reduced by making some benefits conditional on taking work opportunities; he highlighted youth employment reforms as the government seeks to curb a welfare bill, which is projected to exceed GBP 330bln this fiscal year. Burnham is expected to announce further cost-of-living and housing measures this week. UK PM Burnham will host Ukraine President Zelensky later today, his first international visitor since becoming PM; Burnham has pledged continued UK support for Ukraine, and will announce sharing IP for the UK’s Stone Cloak electronic warfare system, allowing Ukraine to manufacture it at scale. Zelensky will meet US President Trump on Tuesday. In German politics, Chancellor Merz appointed Steffen Bilger as transport minister after his initial choice declined the role; Bilger will oversee a EUR 34bln transport budget for 2026. The appointment forms part of a broader government reshuffle ahead of September’s regional elections. STOCK SPECIFICS: HEALTHCARE: AstraZeneca (AZN LN) reported stronger than expected quarterly profit as cancer medicines drove growth; it reported adj. EPS of 2.63 (exp. 2.48), and revenue of USD 15.4bln (exp. 15.3bln). Investors are focused on upcoming oncology trial results after the shares fell 8% this year following disappointing Wainua data. Exec said it remains confident in the strength of its pipeline, and have more than twenty high-value readouts due over the next 18 months, and the company is on track to deliver its USD 80bn total revenue ambition. Elsewhere, it announced results from the CLARITY-Gastric01 Phase III trial which met the dual primary endpoints. Argenx (ARGX NA) will acquire Forte Biosciences (FBRX) for USD 77/shr in cash, valuing the company at about USD 2.2bln; the deal adds a first-in-class anti-CD122 antibody, with Phase 1b proof-of-concept in vitiligo and coeliac disease, strengthening Argenx’s immunology pipeline. FINANCIALS: HSBC (HSBA LN) is nearing the sale of its AUD 30bln+ Australian loan book to Blackstone’s (BX) private credit arm, AFR reports; the deal would mark Blackstone’s entry into Australian home lending. UK pensions managers are said to be considering forming a GBP 1bln fund which would invest in domestic science and technology firms. TECH: Samsung Electronics (005930 KS) is considering using lower-cost Chinese-made DRAM in smartphones for China to reduce manufacturing costs and expand Galaxy A-series shipments as rivals cut output amid rising component prices, Asia Times reports. CXMT (688825 CH) surged on its Shanghai debut, rising by over 500%, becoming China’s largest onshore-listed company; the chipmaker raised CNY 57.92bln in Asia’s largest IPO this year, reaching a market value of about CNY 3.5tln, and plans to fund memory-wafer production and research. COMMUNICATIONS: Vodafone (VOD LN) reported Q1 FY27 revenue of EUR 10.29bln, and service revenue of EUR 8.63bln (exp. 8.23bln), with service revenue growth of 5.2% (exp. 4.6%); it sees FY27 adj. FCF and adj. EBITDA at the upper ends of the EUR 2.6-2.9bln and EUR 13.0-13.3bln respective guidance ranges. ENERGY: DCC Energy (DCC LN) is set to be acquired by KKR & Co. (KKR) and ECP for GBP 67.9722/shr (vs Friday’s closing price of 62.85/shr). Galp Energia (GALP PL) acquires a 361MW fully operational onshore wind portfolio within Spain from Acciona Energy (ANA SM) for an enterprise value of EUR 420mln. Baker Hughes (BKR) published Q2 metrics on the weekend, where it reported adj. EPS of 0.64 (exp. 0.50), and revenue down 2% Y/Y at USD 6.74bln; it expects to achieve the midpoint of its FY26 guidance, and raised its Industrial & Energy Technology orders outlook to above USD 45bln through 2028. NOTABLE BROKER UPDATES: Thales (HO FP) upgraded at Deutsche Bank; Neste (NESTE FH) upgraded at Deutsche Bank. Delivery Hero (DHER GY) downgraded at Jefferies. SAP (SAP GY) maintained with an Outperform rating at BMO; STMicroelectronics (STMPA FP) maintained with an Outperform rating at Mizuho. DAY AHEAD: EVENTS: Eurogroup Economic and Financial Affairs Council convenes on budget matters. UK PM Burnham will host Ukraine President Zelensky in the UK, his first international visitor since becoming PM; Zelensky will meet US President Trump on Tuesday. DATA: In Europe, Germany Ifo business climate for July is expected at 86.1 (prev. 85.6), with current conditions easing to 86.5 (prev. 87.0) and expectations easing to 83.7 (prev. 84.1); Eurozone M3 money supply (prev. 3.2% Y/Y), and loans data are due; UK CBI distributive trades (prev. -54). In North America, US durable goods orders for June are seen rising 2.3% M/M (prev. -4.5%), with the ex-transport figure at 0.9% M/M (prev. 1.3%); Dallas Fed manufacturing index is seen slipping to -1 (prev. 0); after today’s data, the Atlanta Fed will update its Q2 GDPNow tracking estimate (prev. 1.70%). CENTRAL BANKS: BoC publishes Market Participants Survey; BoE releases June capital issuance data. SUPPLY: US sells USD 69bln of 2-year notes and USD 70bln of 5-year notes. EARNINGS: Notable companies reporting today include: AstraZeneca (AZN), Welltower (WELL), Cadence Design Systems (CDNS), Baker Hughes (BKR), Nucor (NUE), Cincinnati Financial (CINF), Principal Financial Group (PFG), Brown & Brown (BRO), F5 Inc. (FFIV), UDR (UDR), Universal Health Services (UHS). WEEK AHEAD: This week’s major data/policy announcements include: rate announcements from the Fed, BoE, BoJ, US PCE inflation data and Q2 GDP stats, as well as Eurozone inflation metrics. Notable companies reporting this week include: Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Meta (META), Visa (V), ExxonMobil (XOM), Mastercard (MA), AbbVie (ABBV), Lam Research (LRCX), Chevron (CVX), Coca-Cola (KO), Procter & Gamble (PG), ARM Holdings (ARM), KLA (KLAC), Linde (LIN), QUALCOMM (QCOM), Boeing (BA), Corning (GLW), Bristol-Myers Squibb (BMY), Starbucks (SBUX), General Dynamics (GD), United Parcel Service (UPS), Robinhood Markets (HOOD), Cadence Design (CDNS). Click here for Newsquawk’s week ahead preview Click here for weekly US corporate earnings estimates