EUROPEAN OPEN: AZN LN breast cancer trial missed endpoints; GSK LN ARTEMIS-008 trial met endpoint; HSBC prepares CFO search; ENX FP open to DB1 GY merger/tie-up; OR FP sued by Arizona over hair relaxer risks; STLAM IM plans EUR 1bln+ French van investment

EUROPEAN OPEN: European equities start the week on the backfoot. Global stocks have come under pressure after Anthropic, OpenAI and xAI backed slowing advanced AI development, weighing on Nasdaq 100 futures. In APAC trade, South Korea’s KOSPI was down around 3%, and other EM stocks also declined for a third session, with Middle East tensions and rate uncertainty also adding to the downside for risk assets. Traders will this week look towards FOMC, BoE and BoJ policy announcements, with the FOMC now seen lifting rates by at least 25bps on Wednesday following Friday’s ‘hot’ inflation data. Money markets are pricing almost 90% chance of a hike. Brent’s rise above USD 108/bbl is also adding to inflation concerns, with crude supported after Saudi Arabia closed its East-West pipeline following attacks, as Middle East tensions continue. Analysts note that the pipeline can carry about 7mln b/d, and prolonged disruption could force output cuts. Additionally, Iran’s planned unveiling of a temporary Strait of Hormuz shipping lane agreement was postponed after Oman delayed a Gulf foreign ministers’ meeting at regional countries’ request; Bahrain declined to participate, citing recent Iranian-backed attacks on Gulf sites. Brent climbed above USD 108/bbl before paring gains, and enters the European day below USD 107/bbl. Gold held near USD 4,350/oz after a third straight weekly decline as hotter US inflation increased expectations of a Fed rate hike. Copper prices fell on expectations of hikes, while the spot premium over three-month futures also narrowed to around USD 4.50/ton, signalling easing supply tightness. In politics, Sweden’s election remained too close to call, with the centre-left bloc on 176 seats vs 173 for PM Kristersson’s ruling bloc after 94% of votes were counted. Late and overseas ballots will be counted from Wednesday, potentially extending into Thursday, with either bloc likely to govern by a very narrow margin. ECB President Lagarde said Euro area inflation will remain elevated as the Middle East conflict and damage to global refining capacity keep energy costs high. She said the shock is lasting longer than expected, while the resilient economy requires a policy response. Lagarde is due to speak again today. Late Friday, Fitch affirmed Italy at BBB+ with a stable outlook, citing recent political stability as a positive anchor. The CRA however warned that a continued rise in public debt-to-GDP over the medium term could trigger a downgrade. It also said a shift from the proportional electoral system could support formation of a more stable government. STOCK SPECIFICS: HEALTHCARE: AstraZeneca (AZN LN) SERENA-4 Phase III trial of Etcamah (camizestrant) in combination with palbociclib did not meet the primary endpoint of progression-free survival, though a numerical improvement was observed in first-line treatment of ER-positive, HER2-negative advanced breast cancer patients. Roche (ROP SW) said collaborator MediLink’s Phase III TAISHAN-302 trial of Tam-Peli met its primary overall survival endpoint in relapsed small-cell lung cancer, reducing death risk by 54%. China’s NMPA has accepted the NDA for filing. GSK (GSK LN) licensor Hansoh Pharmaceutical Group said the Phase III ARTEMIS-008 trial met its primary overall survival endpoint in relapsed small-cell lung cancer. GSK also reported positive Phase I/II ARROS-1 results for Jideytro in TKI-naive ROS1-positive NSCLC. Elsewhere, GSK said it will be closing its flu vaccination factory in Dresden, Germany, due to the slowing demand for its egg-based flu vaccines. FINANCIALS: Of note for EU Banks, financial services commissioner Maria Luis Albuquerque rejected banks’ calls to split the bloc’s financial reform package. She said reforms to reduce fragmentation, cross-border barriers and regulatory complexity should be handled together. Bank leaders had urged faster simplification measures while allowing more time for contentious issues such as a European deposit insurance scheme. Bloomberg reports that HSBC (HSBA LN) is preparing to search for a new CFO after Pam Kaur said she will retire in 2027; potential candidates include internal executives Will McLane, Faisal Yousaf, Aileen Taylor, Barry O’Byrne, Jon Bingham and Jack Yang, alongside former HSBC executive Claire Baird; external names include William Chalmers, Jim O’Neil and Kavita Mahtani. Euronext (ENX FP) CEO said the company is open to a merger with Deutsche Borse (DB1 GY) or a tie-up between their stock-exchange businesses, FT reports; he said such a deal could boost liquidity and strengthen European market competitiveness, while cautioning that significant regulatory hurdles would need to be overcome. CONSUMER DEFENSIVE: Arizona sued L’Oreal (OR FP) and its US subsidiary, alleging they concealed cancer risks linked to hair relaxers and violated state consumer-protection laws. The state seeks penalties, damages and warnings on sales. L’Oreal denies the claims. CONSUMER CYCLICAL: Stellantis (STLAM IM) plans to invest more than EUR 1bln to design and build a new van in France; the company also signed a memorandum with Roshel for the sale of an unused Toronto-area factory for up to CAD 4.9bln. Separately, Unifor said collective bargaining talks with Stellantis have reached an impasse. NOTABLE BROKER UPDATES: Stellantis (STLAM IM) downgraded at Morgan Stanley; HSBC (HSBA LN) downgraded at Keefe Bruyette; Hermes (RMS FP) downgraded at AlphaValue. Huber+Suhner (HUBN SW) initiated with a Buy at Jefferies. Antofagasta (ANTO LN) upgraded at Berenberg; Renault (RNO FP) upgraded at Morgan Stanley; Standard Chartered (STAN LN) upgraded at Keefe Bruyette; Straumann Holding (STMN SW) upgraded at Goldman Sachs. DAY AHEAD: DATA: In North America, Canada August CPI is seen unchanged at 3.0% Y/Y, with the monthly rate seen rising 0.3% M/M (prev. 0.5%); core CPI is seen unchanged at 2.3% Y/Y, while the monthly rate is seen rising 0.1% M/M (prev. 0.2%). CENTRAL BANKS: ECB President Lagarde (neutral) gives a keynote in Austria (text released) and participates in a panel (no text); ECB’s Schnabel (hawk) delivers a keynote at the BMWE Symposium (slides released); ECB’s Cipollone also speaks (text released); ECB will publish its September Survey of Monetary Analysts. SUPPLY: UK holds a BoE short-maturity gilt sale (GBP 725mln); US Treasury will announce a 10-30 year TIPS liquidity support buyback. WEEK AHEAD: Highlights include policy announcements from the FOMC, BoJ, BoE; inflation data from UK, Canada and Japan. Our week ahead preview is available in the Research Suite of the Newsquawk website.