EUROPEAN EQUITIES UPDATE: Stocks gain in anticipation of Trump's deal announcement

STOXX 600: +0.3%

• European bourses opened mostly firmer and have traded with an upward bias throughout the European morning.


• To recap recent highlights; the Fed decided to keep rates unchanged (as expected), and reiterated a wait-and-see approach. Ultimately this sparked two-way price action in the equities complex.


• Thereafter, sentiment was boosted after US President Trump posted on Truth Social that he will be announcing a major trade deal at 15:00 BST – reports suggest that this will be with the UK.


• Docket today has included German Trade Balance (larger surplus than expected), Industrial Output (topped expectations), Riksbank & Norges Bank Announcements (both held as expected). Attention now turns to the BoE.


• For EU-US trade, traders will keep a keen eye out for the EU's provisional tariff countermeasures which would be implemented if "talks fail".

Sectors: Mixed

• European sectors are mixed; Tech takes the top spot, joined closely by Industrials whilst Healthcare lags.


• Tech benefits from post-earning strength in Infineon (discussed below). Also helping to boost sentiment is a report via Bloomberg which suggested that US President Trump is to rescind global chip curbs amid AI restrictions debate. Though it is worth highlighting this would only be an order to scrap Biden’s policy which aimed to limit exports of AI chips.


• Industrials are boosted by gains in Rheinmetall (discussed below); Airbus (+0.9%) is also moving higher today after the Co. affirmed its 2025 targets, despite seeing an 8% Y/Y decline in its April deliveries.


• Healthcare is once again underperforming today, continuing the hefty losses seen in the prior session.

Others: FTSE 100 +0.3%, DAX 40 +1%, CAC 40 +0.8%

• FTSE 100 is essentially flat and underperforming vs peers. In terms of key movers; Flutter (-2.1%) dips lower after its Q1 results; the Co. missed on its headline metrics and cut its FY US guidance. Elsewhere, Airtel Africa (-8%) bottoms the index after its results; Centrica (-7.5%) follows closely behind after warning of a profit hit. For the UK more broadly, President Trump is set to announce a major trade deal – reports suggest it will be a framework agreement with the UK, rather than a full deal. A UK spokesperson suggested PM Starmer will give an update on trade talks later today. Trade aside, the BoE is set to deliver a 25bps reduction in a 9-0 vote split; focus will be on any adjustment to its "gradual and careful" stance on the Bank rate.


• The DAX 40 is firmer and one of the better performers in Europe. Siemens Energy (+3.4%) benefits after reporting strong results, highlighting that its order backlog reached a new record high. Infineon (+3.5%) is also stronger post-earnings; the Co. missed on its top- and bottom-lines and said it now sees 2025 rev. slightly lower Y/Y due to tariff impact. Positivity may stem from its Q3 outlook topping expectations. Elsewhere, Rheinmetall (+2.5%) gains after reporting strong Q1 results and suggested it could adjust guidance to factor in the latest geopolitical developments.

US Equity Futures: ES +0.8%, NQ +1%, RTY +1.1%

• Futures are broadly in the green, in-fitting with the broader risk tone as markets await Trump’s trade announcement.


• Day ahead: The US will publish weekly initial and continuing claims data (the former is seen easing to 230k from 241k, while the latter is seen easing to 1.886mln from 1.916mln). US Q1 unit labour costs (seen at 5.1% vs a prior 2.2%) and productivity (-0.7% expected following 1.5% prior) stats are also due, along with wholesale sales for March.

08 May 2025 - 09:50- ForexData- Source: Newsquawk