EUROPEAN EQUITY UPDATE: Modestly firmer start has given way to slight pressure into a packed afternoon

STOXX 600: -0.1%

• European bourses began the month, quarter and half year modestly in the green, aided by a constructive APAC handover led by overall strong Japanese Tankan, and Chinese Caixin PMI.


• However, gains have since waned, dragging the STOXX modestly into the red, with a lack of macro newsflow this European morning in the run-up to this week's risk events.


• Ahead, the ECB Sintra conference Fed Chair Powell will appear on a panel alongside ECB President Lagarde, BoE Governor Bailey, BoJ Governor Ueda, and BoK Governor Rhee at 14:30 BST. There have been a few speakers this morning, most notably, ECB VP de Guindos, who said EUR/USD at 1.17 is “perfectly acceptable”. (See FX update for more)


• On the trade front, the EU will reportedly accept US President Trump’s universal tariff, but seeking exemptions and commitments to lower tariffs on pharmaceuticals, alcohol, semiconductors and commercial aircraft; the EU is also pushing for quotas and exemptions to reduce 25% tariffs on cars and parts and 50% tariffs on steel and aluminium.


• Most recently, flash EZ inflation metrics came in line with expectations of a 2.0% Y/Y increase - with markets pricing 24bps by year-end, unchanged from pre-data pricing.

Sectors: Mixed

• European sectors are mixed, at the top of the pile sits Utilities, with the likes of UK listed National Grid +1.5%, potentially powered by the near record temperatures in the UK. Towards the bottom of the pile are Autos, driven lower by Mercedes Benz and Renault, the latter its sixth largest constituent, who reported a non-cash loss of EUR 9.5bln on its 35.7% stake in Nissan for H1 2025.

Individual Movers

• Umicore +9.0%: Guided FY EBITDA higher than expected.


• Sainsbury -0.8%: Expects to continue to grow grocery volumes ahead of the market. Total Retail Sales (ex-fuel) 4.9%; LFL sales (ex-fuel) 4.7%.


• Mercedes Benz -1.7%: Q2 2025 group sales expected to be roughly flat vs. Q1.


• Renault -0.7%: to report a non-cash loss of EUR 9.5bln on its 35.7% stake in Nissan for H1 2025.


• Mediobanca -3.0%: Banca Mediolanum sells its entire 3.5% stake in Mediobanca priced at EUR 18.85.


• Inpost -4.4%: 17.5M shares from AI Prime & CY sold via Barclays.


• BBVA -1.3%: confirmed it will not withdraw its acquisition offer for Sabadell +0.6% despite Spanish government conditions requiring the two banks to remain legally separate and operate independently for at least three years.


• Sodexo -3.5%, guided to the low end of FY organic revenue.

US Equity Futures: ES -0.2%, NQ -0.3%, RTY -0.1%

• US equity futures, like their European counterparts, are posting modest losses after Monday’s session of gains. Today’s focus remains on Capitol Hill, with the Senate’s vote-a-rama on the GOP’s “big, beautiful bill” over 13 hours in, voting gaining pace after delays for rulings.


• The US Day sees the release of the ISM manufacturing PMI for June, where the headline is seen inching up to 48.8 while prices are expected to decline slightly. On the labour market front, the JOLTs data for May are expected to show job openings paring to 7.3mln from 7.391mln; the vacancy rate previously rose to 4.4% from 4.3%, and the quits rate fell to 2.0% from 2.1%. Elsewhere, construction spending, and the RCM/TIPP economic optimism data are due. Notable corporations reporting earnings today include Constellation Brands (STZ).

01 Jul 2025 - 10:20- ForexGeopolitical- Source: Newsquawk