EUROPEAN EQUITIES UPDATE: Sentiment hit as Iran-Israel strikes continue as Trump posts that "everyone" should evacuate Tehran

STOXX 600: -0.6%

• European bourses opened lower across the board and sentiment continued to wane as the morning progressed; the complex is currently just off worst levels.


• Sentiment today has been hit amid the tumultuous geopolitical environment in the Middle East. Iran and Israel have continued to strike each other overnight; Israel hit Iranian state broadcasters, whilst a Senior Iranian Army Commander said attacks will “continue to intensify”.


• US President Trump continues to weigh in, he posted on Truth that "Everyone should immediately evacuate Tehran!". Interestingly, cut his G7 trip short – on which, Trump suggested it had nothing to do with a “ceasefire” and is something "much bigger". Later CBS’s Jacobs made evident Trump’s hawkish nature, where he reportedly said he wants Iran to give up “entirely” on nukes; he also suggested that Israel’s barrage on Iran is not slowing.


• On possible peace solutions, he said that he “may” send Special Envoy Witkoff or Vice President Vance to meet with Iran.


• Back to Europe, docket has been fairly light aside from inconsequential commentary from ECB’s Stournaras, who ultimately just reiterated the Bank’s data dependent approach. On the data front, German ZEW Economic Sentiment jumped higher and surpassed the most optimistic of expectations. The accompanying commentary pins this on more investment and improving consumer demand.

Sectors: Negative

• European sectors hold a strong negative bias with only a handful of sectors in positive territory.


• Unsurprisingly, Energy takes the top spot with the complex boosted by the ongoing strength in oil prices amid geopolitical uncertainty in the Middle East. Autos is incrementally in positive territory, with Chemicals completing the top 3. On autos specifically, nothing particularly stands out for the index; perhaps some upside in names in anticipation of potential trade announcements out of the G7 Summit in Canada. Also, US President Trump is expected to sign proclamation finalizing US-UK trade deal in coming days; is to cover beef, steel, autos and ethanol, according to Reuters citing sources.


• Banks sit at the foot of the pile, joined closely by Telecoms and then Media. For Telecoms specifically, the sector is pressured by losses in Deutsche Telekom (-2.4%) after Bloomberg reported that SoftBank is seeking to raise up to USD 4.9bln through the sale of T-Mobile shares. Do note that the German telecom provider holds a 51.5% stake in T-Mobile.


• Pharma names have moved lower in recent trade after Trump said pharma tariffs are coming "very soon"; the likes of Roche/AstraZeneca/Novo Nordisk all moved lower on this.

Others: FTSE 100 -0.4%, DAX 40 -1.1%

• The FTSE 100 on the backfoot but faring a little better vs European peers – largely thanks to its heavy weighting to energy names which move higher today given the continued geopolitical unrest in the Middle East; Shell (+1.2%) and BP (+2.1%). Elsewhere, Informa (+0.8%) reported strong underlying rev. growth and reaffirmed its guidance.

US Equity Futures: ES -0.4%, NQ -0.4%, RTY -0.8%

• Futures are modestly lower across the board in-fitting with the downbeat risk tone, for the reasons mentioned above.


• Docket ahead will focus on US Retail Sales; headline M/M expected to print at -0.7% (prev. 0.1%). That aside, traders will then turn their attention to the looming FOMC announcement on Wednesday.

17 Jun 2025 - 10:20- ForexGeopolitical- Source: Newsquawk