EUROPEAN EQUITIES UPDATE: Sentiment on the backfoot as tariff fears mount

Bourses: STOXX 600: -0.6%

• European bourses were primed to begin the day lower, and losses accelerated at the open after the US threat of imposition of US Auto tariffs on April 2nd, which is very much the driver of broader sentiment. Shares in automakers opened with hefty losses but have reversed course modestly - with the likes of VW, BMW, Stellantis and Mercedes lower in a range of 2.3-4.5% at the open, each up around a percent from lows.


• From a fundamental perspective, the focus remains on any response from the EU, which may include retaliatory measures or updates on trade negotiations. Meanwhile, UK Chancellor Reeves said the UK and US are in “intense negotiations” on this subject.


• Ahead, the European day sees potential comments from ECB’s Lagarde, Schnabel, Escriva, Wunsch and de Guindos, and throughout the day we may see comments from EU officials at the EU Defence Summit on Ukraine.

Sectors: Negative

• Sectors are broadly in the red, with Autos the clear laggard, followed by Financial services, its largest constituent UBS down 3.4% after a broker downgrade.


• At the top of the pile, Retail is being led by Next (+5.5%) whose metrics were mostly in line, but they upgraded their sales guidance.


• There is a broad defensive bias with Utilities, Personal Care, Real Estate and Food & Beverage the only other sectors in the green, although Retail stands at the top amid idiosyncratic factors.

US Equity Futures: ES +0.1%, NQ U/C, RTY +0.2%

• US Futures are mixed despite European losses. RTY outperforms while SPX and NQ remain flat at the time of writing. Price action so far has been tentative, altohugh futures trimmed the APAC losses of around half percent.


• Attention as always remains on any potential remarks from the US President, who will sign Executive Orders at 14:00 EDT, along with a packed US data slate, which sees final quarterly metrics for PCE and GDP, Jobless claims, and we are expecting speak from Fed’s Collins and Barkin.

27 Mar 2025 - 10:15- ForexEU Research- Source: Newsquawk