EUROPEAN OPEN: SHEL LN to acquire Angola blocks from CVX

EUROPEAN OPEN: SHEL LN to acquire Angola blocks from Chevron (CVX); Thyssenkrupp (TKA GY) could sell TKSE to Jindal; Reckitt Benckiser (RKT LN) special dividend; Alcon (ALC SW) terminates merger with Staar Surgical (STAA); Ørsted (ORSTED DC) sues US over Sunrise Wind construction halt; EZ inflation, US ADP jobs and JOLTS ahead

• European equities opened mixed amid varied sector performances.
• Energy and tech stocks in Asia faced pressure, while rare earth stocks surged.
• Key economic data releases in the US and Europe are in focus for market participants.

European markets opened with mixed sentiment, reflecting a varied performance across sectors. This follows a similarly mixed session in Asia, where the Hang Seng and Shanghai Composite were weighed down by declines in energy and tech stocks. The drop in oil prices and regulatory measures on online platforms contributed to this pressure. However, the trading volume in Chinese stocks has reached a four-month high, suggesting potential for continued momentum in the early-2026 equity rally. Goldman Sachs projects a 20% gain for Chinese stocks this year, which could influence investor sentiment.

In the commodities space, iron ore prices have climbed to their highest levels since February, driven by expectations of macroeconomic support in China and pre-holiday restocking activities. Conversely, nickel prices have retreated from a 19-month high as the recent rally in base metals paused. Gold prices have also softened as traders shift focus from geopolitical risks to upcoming US economic data, with bullion trading near USD 4,470/oz.

Crude oil prices have declined, with Brent nearing USD 60/bbl and WTI around USD 56/bbl. This comes as the US seeks greater control over Venezuela's oil industry, with President Trump announcing that Venezuela will supply up to 50 million barrels of crude to the US. The proceeds from these sales will be managed by the President to benefit both nations. Trump is set to meet with major US oil producers, including Chevron, ConocoPhillips, and Exxon, to discuss significant investments in Venezuela's oil sector.

In the fixed income market, US Treasury yields are slightly lower, with traders in Treasury options increasing bets that 10-year yields may fall below 4% in the coming weeks. This positioning has been building since late December as investors await key economic data delayed by the government shutdown. A record block trade in US federal funds futures was noted ahead of key US labour data, highlighting market anticipation.

Today's agenda includes significant US labour market data, with the ADP nonfarm employment report and JOLTS job openings data due. These releases are closely watched as they precede Friday's official employment situation report. In Europe, the focus is on Eurozone inflation data, with expectations for a slight cooling in December. The ISM Services PMI in the US is also anticipated to show a modest decline.

Trader Insight:

• Some traders may consider monitoring WTI crude prices following developments in US-Venezuela oil relations.
• Market participants are watching the XLE ETF for potential shifts in energy sector sentiment.
• Observers could assess the impact of Eurozone inflation data on EUR/USD currency pairs.
• Traders are positioning in US Treasury options, anticipating potential movements in 10-year yields.

Disclaimer: This is not trading advice. For informational purposes only.