EUROPEAN EQUITY UPDATE: FTSE 100 shines, DAX underperforms as autos pressured by trade announcements

STOXX 600: -0.4%

• Stocks have begun the week on the backfoot, after weekend trade updates dampened sentiment.


• The FTSE 100 is the only European index in the green with the UK’s Cross-Atlantic trade deal helping the country dodge new tariff rates. The worst performer on the continent is Germany, which sees broad weakness in its auto names, which, prior to the announcement, were thought to have been helped within the deal. Volkswagen (-1.9%), BMW (-2.0%), Porsche (-2.2%).


• On the trade front, the US issued tariff letters to Mexico and the EU, threatening a 30% tariff rate, effective from August 1st. For the EU, it comes at a level much higher than source reporting suggested last week, which was said to be 10% with caveats. However, limiting the downside is the breathing space provided by the August 1st deadline, and the element of “TACO”.


• EU Ministers today are meeting in Brussels to mull a potential response to Trump’s tariff announcement. Danish Foreign Minister Rasmussen, who is chairing this meeting, said "We don't want any kind of trade war. It is in no one's interest."


• EU Commission President von der Leyen flagged "proportionate countermeasures" would be forthcoming, and urged continued negotiations; and while reports state the EU has extended its suspension of retaliatory measures until August 1st to allow further talks, the bloc is reportedly planning to increase cooperation with countries affected by Trump’s tariffs, including Canada and Japan, exploring potential coordination to address new US tariff threats to the bloc and its trading partners.


• Ahead, the data docket is thin, we are expecting comments from US president Trump, who will reportedly unveil a new Ukraine weapons plan involving offensive arms, including potential long-range missiles, marking a shift from prior defensive-only aid.

Sectors: Negative bias

• Sectors opened entirely in the red, though fare better now, with Healthcare and Basic Resources boosted by UK optimism, as we see gains in Astrazeneca (+1.9%), Fresnillo (+3.0% top of the FTSE 100) and Glencore (+1.3%).


• To the downside, lies trade sensitive Autos and Consumer products, pressured by the aforementioned weekend developments. Notable movers in the sectors include their respective top constituents, Ferrari (-1.3%) and LVMH (-1.5%).

Individual Movers

• Eutelsat +0.6%: Japan and EU said to be seeking development of a joint satellite network


• Thales +1.6%: French President Macron pledged to raise France’s annual defence budget


• Banco BPM +3.0%: Credit Agricole will ask ECB authorisation to cross 20% in the share capital of Banco BPM


• Hermes -2.2%: Downgraded at Jefferies


• Luxury exporters: Kering -1.7%, Richemont -1.4%, Remy Contreau -4.2%, Pernod Ricard +1.9%


• Brenntag -2.4%: Worse than expected prelim earnings, lowers guidance


• Astrazeneca +2.0%: AstraZeneca’s Baxdrostat met primary and secondary endpoints in a Phase 3 trial for hypertension, showing significant systolic blood pressure reductions at 2mg and 1mg doses.

US: ES -0.4, NQ -0.4%, RTY -0.6%

• US Equity futures are moving in tandem with those in Europe. RTY is once again the underperformer, given the downbeat risk environment. We are off worst levels in the US, helped by earlier dollar strength which has since waned.


• In terms of the US calendar, there is not a lot by way of scheduled economic data releases on Monday's docket, though Fastenal is due to publish its earnings in the premarket.


• In terms of some premarket movers, Boeing (+1.2%) after its fuel switches were deemed safe following the Air India crash, crypto names are also performing well, Strategy & Riot Platforms (+3.4%), as Bitcoin soared passed the USD 120k mark.

14 Jul 2025 - 10:00- ForexGeopolitical- Source: Newsquawk