EUROPEAN OPEN: GMAB DC & ABBV epcoritamab/R-CHOP combo improves progression-free survival; ABBV guides Q3 adj. EPS below exps; CVC NA raises REC IM offer; BPCE acquires 7% stake in SAB SM; OR FP explores options for US legal liabilities

EUROPEAN OPEN: European equities started Tuesday trading on the front foot. Overnight, APAC stocks mostly took impetus from the positive handover from Wall Street, where all major indices gained and the Nasdaq led the advances to print fresh record highs, despite the continued upside in long-term Treasury yields. December Brent trades sub-USD 100/bbl as crude futures continued to the downside following a 2% slide on Monday, amid rising Persian Gulf exports and Saudi OSP cuts pointed to looser supply conditions. Recovering Hormuz flows and emergency stock releases have also weighed on prices recently, though Yemen fighting and attack risks have limited further declines. The downside in crude is helping to support equity futures. Gold slipped, and trades around USD 4,120/oz as Europe gets underway; overnight, a stronger USD and higher Treasury yields offset reduced expectations for an imminent Fed hike, analysts said. Copper rose for a third session, supported by gains in tech stocks, and expectations of stronger AI-related demand for data centres and power infrastructure. In European budget-related news, Spanish PM Sanchez’s snap election call makes it less likely the EU will reach agreement on its long-term budget by end-2026, Politico reports citing sources. Separately, German Chancellor Merz’s coalition is reportedly struggling to agree tax measures worth more than EUR 4bln annually to close a widening budget gap, Bloomberg reports; disputes over sugar, plastic and crypto levies could force reopening the 2027 budget and threaten November approval, adding to concerns over the government’s stability, the report adds. In France, hundreds of French high schools are set to close as teacher unions join student-led protests demanding more education funding. The movement began around Paris in September and has now spread nationwide. Elsewhere, far-right Marine Le Pen will today propose a 2027 shadow budget that has EUR 25bln of annual spending cuts, as French borrowing costs surge; the National Rally leader is seeking fiscal credibility ahead of the 2027 presidential election. PM Lecornu’s government has proposed EUR 43bln of savings in its own 2027 budget. Amid the political/fiscal woes in Europe recently, traders have begun to dovishly reprice ECB rate hike expectations. ING said turmoil in EGBs could drive a further dovish repricing of the ECB rate path, with limited second-round inflation risks currently seen. It added that credible fiscal measures from France’s National Rally could help narrow French bond spreads. In the UK, PM Burnham is considering delaying a decision on increasing defence spending until Autumn 2027, The Times reports; ministers had been expected to set out a timetable in the Spring, but may postpone it in hopes that economic conditions improve. In economic data, German factory orders fell by -10.6% M/M in August (exp. -1%; prev. +2.5%); ex-large orders, orders slipped just 0.1%. The decline was driven by a 61.5% decline in “Other Vehicle Construction” after July’s large-order surge; June-August orders were 1.3% above the prior three months, but down 2.6% ex-large orders. STOCK SPECIFICS: HEALTHCARE: Genmab (GMAB DC) and AbbVie (ABBV) said epcoritamab combined with R-CHOP delivered a statistically significant improvement in progression-free survival in patients with newly diagnosed diffuse large B-cell lymphoma. Separately, AbbVie expects Q3 adj. EPS between 3.73-3.77 (exp. 3.84), which includes USD 216mln of acquired IPR&D and milestone expenses; FY26 adj. EPS is seen between 13.76-13.96 (exp. 14.01), incorporating the expense. CVC Capital Partners (CVC NA) raised its offer for Recordati (REC IM) to EUR 53/shr, valuing the Italian pharmaceutical company at EUR 10.5bln; the revised bid is up from EUR 51.29 after shareholder Palliser Capital pressed for EUR 60/shr. McKesson (MCK) and Clayton Dubilier & Rice are nearing a deal to acquire Option Care Health (OPCH) for more than USD 5bln including debt, FT reports; the transaction could be announced as soon as Tuesday, though talks could still collapse. AstraZeneca (AZN LN) CEO said a major acquisition may not be necessary to sustain growth beyond 2030 because of the company’s broad pipeline. FINANCIALS: Of note for larger banks, US regulators are increasing scrutiny of banks’ exposure to private credit firms, Semafor reports; it comes as bank loans to nonbank institutions have risen from USD 300bln in 2016 to more than USD 1.5tln now; the Fed, ECB, SEC and BoE have all raised concerns over leverage, valuations and resilience. HKMA questioned HSBC (HSBA LN) over locating its new global AI centre in Singapore rather than Hong Kong, according to the FT; the pressure forms part of the regulator’s broader push to entrench the territory’s status as an international financial capital. Raiffeisen Bank (RBI AV) CEO said the bank’s effort to exit Russia could be helped if a EUR 3.15bln windfall payment linked to Rasperia Trading materialises. Cooperative banking group BPCE acquired a 7% stake in Sabadell (SAB SM) and intends to explore strategic cooperation; BPCE does not plan to exceed 9.9%, and will seek approval to appoint a director to Sabadell’s board. ENERGY: President Trump signed an executive order allowing broader use of tax-exempt red diesel for highway vehicles through year-end; the measure effectively waives the USD 0.24/gallon federal tax, and aims to lower fuel costs. TECH: Seagate (STX) and Toshiba are reportedly competing to acquire TDK’s (6762 JT) hard drive magnetic heads business for as much as several billion dollars; TDK is the only independent supplier of HDD magnetic heads. COMMUNICATIONS: Informa (INF LN) plans to raise GBP 940mln to partially fund its acquisition of Clarion at an enterprise value of GBP 2.24bln; it also plans to separate its Academic business to focus the group on its core B2B operations. CONSUMER DEFENSIVE: L’Oreal (OR FP) has hired advisors to explore options for US legal liabilities tied to talc and other chemical ingredients, WSJ reports; its US subsidiary faces mass lawsuits alleging talc products caused illness, while L’Oreal is also among companies facing claims that hair relaxers caused cancer. MATERIALS: Norsk Hydro (NHY NO) said reduced Alunorte production and higher gas purchase costs could impact Q3 2026 Bauxite & Alumina results by USD 75-100mln; the estimated gas-arbitrage impact for Alunorte in Q4 2026 is between USD 90-110mln. Elliott Management said it looks forward to continued constructive dialogue with Air Liquide (AI FP) as the company works to narrow margin and valuation gaps with peers and create long-term shareholder value. NOTABLE BROKER UPDATES: Rio Tinto (RIO LN) upgraded at RBC; OMV (OMV AV) upgraded at RBC; Henkel (HEN3 GY) upgraded at Goldman Sachs; Wartsila (WRT1V FH) upgraded at Goldman Sachs; Storebrand (STB NO) upgraded at Jefferies. Schneider Electric (SU FP) downgraded at JPMorgan; Ferrovial (FER SM) downgraded at JPMorgan. DAY AHEAD: EVENTS: French National Rally’s Le Pen will give a shadow budget presentation today. DATA: In Europe, Eurozone retail sales are seen rising 0.2% M/M (prev. -0.6%), and to 1.0% Y/Y (prev. 0.6%). September construction PMIs are also due today: Eurozone (prev. 43.0), UK (prev. 44.3), Germany (prev. 48.7), France (prev. 37.3) and Italy (prev. 41.7). In North America, US August trade balance (prev. USD -88.6bln); Atlanta Fed will update its Q3 GDPNow tracking estimate after today’s data (prev. 3.7%); weekly ADP jobs figures are due (prev. 20K); Canada will release its Ivey PMI (exp. 65.2, prev. 64.3) and trade balance (prev. CAD 0.77bln). CENTRAL BANKS: Fed’s Williams (voter) moderates a panel; Fed’s Bowman (voter) speaks on modernising regulation and supervision; Fed’s Schmid (2028 voter) will participate in a fireside chat. ECB’s Elderson participates in a panel (text released); ECB’s Cipollone speaks at a digital euro conference (text released). BoE’s Mann (hawk) participates in a fireside chat. Norges Bank’s Bache participates in a panel. SUPPLY: US sells USD 58bln of 3yr notes. Germany auctions EUR 6bln of Schatz; UK sells GBP 1.25bln of 2035 linkers. ENERGY: EIA will publish its October Short-Term Energy Outlook; after the US close, weekly ADP inventory data will be published.