EUROPEAN EQUITIES UPDATE: Mixed start with a downward bias as traders await the ECB

STOXX 600: -0.5%

• European bourses opened mixed, but have gradually succumbed to selling pressure to display a negative picture in Europe. Positive updates related to US-Japan trade and strong TSMC results (discussed below) have failed to lift broader sentiment.
• Trade/macro updates have been relatively light thus far; traders continue to digest the latest commentary from Fed’s Powell; the Chair affirmed a wait-and-see approach amid high uncertainty. Elsewhere, US President Trump suggested “big progress” has been made with Japan on trade.
• The ECB will take the centre of attention ahead; the Bank is expected to cut by 25bps, taking the Deposit Rate to 2.25%. Focus will be on how the GC frames the risks surrounding the trade war. (Full preview in Research Suite)

Sectors: Negative

• European sectors hold a negative bias, in-fitting with the broader risk tone.
• Consumer Products is towards the top of the pile, as traders digest the latest Luxury updates. There have been earnings releases from three high-fashion brands today; Moncler (-1.8%, Q1 topped expectations amid strong Asia demand), Brunello Cucinelli (U/C, in-line figures and maintained guidance), Hermes (-1.9%, Q1 beat but said will implement price hikes in US to offset tariffs).
• Energy takes the top spot, benefiting from the broader strength in oil prices; Basic Resources is marginally in the green, paring some of the recent losses.

Majors: FTSE 100 -0.5%, DAX -0.2%, CAC 40 -0.3%

• The FTSE 100 is on the backfoot, with losses to similar magnitude as peers. Sainsbury’s (+3%) tops the pile after the Co. reported better-than-expected metrics and said it will buyback GBP 200mln shares in 2025/26. Elsewhere, Deliveroo (+2%) benefits after its Q1 results; its metrics were more or less in-line, and maintained its 2025 guidance.
• The DAX 40 is faring a little better vs peers. Siemens Energy (+10.3%) tops the pile after it provided prelim. Q2’25 results, which topped analyst expectations; the Co. also lifted its FY25 guidance.

US Equity Futures: ES +1%, NQ +1.2%, RTY +0.7%

• Futures are entirely in the green, attempting to pare back some of the hefty losses seen in the prior session. Sentiment today has also been lifted by a positive Q1 earnings report from TSMC.
• The chip-maker is currently higher by 4.5% in pre-market trade after topping estimates and provided upbeat Q2 guidance; the Co. said it has “not seen any change in customer behaviour because of US tariffs”, adding that “demand is still very strong”.
• Ahead, US Philly Fed Index, Jobless Claims with commentary from Fed’s Williams, and Barr also due.