EUROPEAN EQUITIES UPDATE: Stocks feel some relief but eye further trade updates

STOXX 600: +0.7%

• European bourses are entirely in the green continuing the strength seen in APAC trade overnight.


• Upside which comes despite some punchy rhetoric from US President Trump on Monday who threatened an additional 50% tariff on China if it doesn't withdraw its 34% tariff increase against the US by today. China said it will fight to the end if the US insists on measures. The lift in sentiment could potentially be pinned on some optimism that Trump is setting his focus on China - which could open up the door for speedier trade deals with other nations. Additionally, overnight several state Chinese funds said it will continue to increase its stock/ETF holdings to support Chinese market stability.


• For the EU specifically; the European Commission proposed a 25% tariff on US goods to take effect from May 16th, according to Reuters citing a document.


• Price action today has been quite choppy today; some modest pressure was seen in early morning trade, but more recently a slight pick up has been seen.


• The EZ-docket has been and will continue to remain very thin; there will be some ECB appearances, but focus will ultimately be on any trade-related updates.

Sectors: Positive

• European sectors hold a strong positive bias, in-fitting with the risk tone.


• Industrials take the top spot, followed closely by Travel & Leisure which continues to benefit from the lower oil prices and better risk appetite. Telecoms sector is lagging today; Banks and Real Estate also find themselves in the red.


• A number of alcohol names have been boosted today after the EU said it would remove US bourbon from its list of goods to face counter-tariffs (this was reported via Reuters in hours on Monday); nonetheless, the likes of Pernod Ricard (+2.1%) and Remy Cointreau (+1.2%) both move higher.

Majors FTSE 100 +1.3%, DAX 40 +0.8%, CAC 40 +0.5%

• The FTSE 100 is on a firmer footing and with gains to a similar magnitude as peers as sentiment continues to improve. There is no clear outperformer today; Rolls Royce (+5%) tops the pile followed by IAG (+4.5%). China-exposed banks such as Standard Chartered (-1.2%) and HSBC (-0.8%) are towards the foot of the pile.


• The DAX 40 is also on a stronger footing today with gains generally broad based; Commerzbank (-2.4%) sits at the foot of the pile as Banks continue to underperform. Infineon (-1.5%) opened higher but reversed course soon after the cash open; the Co. will acquire Marvell’s (MRVL) automotive ethernet unit for USD 2.5bln in cash.

US Equity Futures: ES +1.5%, NQ +1.2%, RTY +1.9%

• Futures are entirely in the green, with the complex continuing the strength seen in APAC/European trade.


• The data docket is thin today, ahead of key data due later this week. US releases today include the NFIB’s March Business Optimism Index; weekly RedBook data. Fed speak today comes via Daly.


• Politico writes that the European Commission is looking to finalise a plan to make its AI rules more favourable to companies.

08 Apr 2025 - 10:20- ForexEU Research- Source: Newsquawk