EUROPEAN EQUITIES UPDATE: Stocks boosted on Trump-Putin meeting, ASML NA +2% on Trump's 100% chip tariff plan

STOXX 600: +0.5%

• European bourses opened mostly higher, albeit with very modest gains. Since then, indices gradually edged higher, then followed by a more pronounced bid following commentary from a Russian Kremlin aide.


• The Russian spokesperson said an agreement had been made for a Presidential meeting between Trump and Putin, in the next few days; no comment was made regarding a meeting with Ukrainian President Zelensky. Nonetheless, the announcement has been well received by the markets, given it boosts the odds of a peace deal between Ukraine and Russia, ahead of Trump's planned tariff on Russia.


• Geopolitics aside, there has been some focus on trade-related updates; firstly with US President Trump planning a 100% tariff on chips, but will spare those who build in the US. Elsewhere, for US-Japan, a US official said the 15% tariff will stack on top of pre-existing tariff rates applied to imports from Japan, unlike in the case of the European Union.


• Docket today has included German Industrial Output, which printed far below expectations; now focus turns to the BoE at mid-day (BST), where the Bank is expected to deliver a 25bps cut – decision aside, focus will be on the composition of the vote split; Mann is seen holding rates, whilst some see ultra-dove Dhingra opt for a larger 50bps cut.

Sectors: Positive

• European sectors opened mixed but now hold a slight positive bias.


• Insurance takes the top spot, lifted by post-earnings strength in the likes of Allianz and Zurich Insurance. Elsewhere, Travel & Leisure has been buoyed by upside in IHG, after it reported strong H1 metrics; European gambling names are also broadly higher today, in tandem with upside in US-peer DraftKings which reported a record rev. and EBITDA. The Tech sector finishes off the top 3, benefiting from a) the risk tone and, b) US President Trump announcing that the US will slap 100% tariffs on imported chips, but will exempt those firms who manufacture in the US/have committed to do so. On this, ASML (+2%) has gained, given the proposition incentivises relocating to the US, which may boost demand for manufacturing units.


• Telecoms is by far the clear underperformer today, dragged down by losses in Deutsche Telekom (-6%) after the Co. reported a miss on its EBITDA figure in its German market. It also highlighted growing rivalry in the local market, where it lost over 20k lines in Q2.

Others: FTSE 100 -0.2%, DAX 40 +1.1%, CAC +0.9%

• The FTSE 100 is in the red today, and underperforming peers, largely thanks to several post-earnings losers and a number of companies entering their ex-dividend date. In terms of the key losers today; Hikma (-7%, H1 Revenue misses some expectations), WPP (-4%, H1 rev. miss and halved dividend), BT (-2%, in tandem to poor DTE GY results). Gainers: IHG (+7%, Affirms FY consensus, H1 adj. EPS +19% Y/Y), Flutter (+3%, boosted by post-earnings strength in peer DraftKing).


• A slew of earnings from within Germany’s DAX 40 today, which is currently the best performing European index today. Allianz (+4%, Op. profit beat, affirms guidance), Henkel (+2%, strong H1 metrics and lifted Adj. RoS guidance for the FY), Siemens (+0.8%, headline beats). To the downside, Rheinmetall (-4.3%) slips post earnings after the Co. missed on Q2 sales, but still confirmed its guidance.

US Equity Futures: ES +0.5%, NQ +0.5%, RTY +0.5%

• Futures are in the green and currently trading towards session highs, in tandem with European equities; a recent bid was seen after a Russian Kremlin Aide said that Russian President Putin and US President Trump are to meet in a few days.


• The US Day features weekly initial jobless claims data (221k expected from 218k) and continuing claims (1.95mln expected from 1.946mln), Q2 unit labour costs (1.5% expected from 6.6%). Wholesale sales are seen rising 0.1% M/M (prev. -0.3%). The NY Fed's survey of consumer expectations (last time, 1yr inflation expectations fell by 0.2ppts to 3.0%, 3yr and 5yr expectations were unchanged at 3.0% and 2.6%, respectively). The Atlanta Fed will update its GDPnow tracking, which is currently modelling growth of 2.5% in Q3. Fed's Bostic (2027 voter) will deliver remarks.

07 Aug 2025 - 10:15- ForexGeopolitical- Source: Newsquawk