EUROPEAN EQUITY UPDATE: Stocks firmer ahead of a packed docket, FTSE 100 outperforms

STOXX 600: +0.3%

• European bourses began the session with gains and are attempting to build on these, ahead of a heavy data slate amid the early market closure in the US for July 4th Independence Day.


• Overnight, big tech gains led the S&P 500 and Nasdaq to new records, though APAC stocks failed to sustain the constructive handover, with sentiment cautious as participants braced for NFP, and digested Chinese Caixin PMIs. On the latter, China’s services activity declined to a nine-month low in June, with the Caixin services PMI falling to 50.6, below the expected and previous.


• On the trade front, the US has reportedly lifted export licence requirements for chip design software sales to China as part of a new trade deal, easing restrictions on critical technologies; Siemens (+1.3%), Synopsys (5.7%), and Cadence (+5.5%) were informed the curbs are no longer in place.


• For UK specifics, PM Starmer voiced his support for the Chancellor, noting the government remains committed to its fiscal rules, following the teary incident in Westminster yesterday, as such, this is benefiting yield sensitive stocks, homebuilders specifically. (See Fixed income update for more)


• Ahead, ECB's meeting minutes will likely be viewed as stale, given the excessive amount of commentary that we have heard from officials from Sintra this week, however there will be attention on any remarks relating to FX levels, as we saw from VP de Guindos earlier in the week.

Sectors: Mostly positive

• Opened entirely in the green, though are now displaying a mixed picture, some defensive sectors coming under pressure.


• Towards the top of the pile sits Retail, which was initially being led by the likes of German listed Adidas and Puma, now negative on news that details of a US-Vietnam trade deal which includes a 20% tariff on Vietnamese goods exported to the US and a 40% tariff on goods deemed to be transshipped through Vietnam.


• Real estate also sits towards the top, led by the aforementioned UK specific news, with the UK’s Segro (+1.5%) the second largest constituent within the sector.

Individual Movers

• Segro +1.5%, Taylor Wimpey +1.6%, Persimmon +1.1%: UK yields down after PM Starmer voices support for his Chancellor


• Siemens +1.0%: Has resumed chip software exports to China.


• Watches of Switzerland -6.0%: Marginal Revenue miss, reports poor margins.


• Glencore +0.4%: Intends to enact a USD 1bln buyback plan after closing Bunge/Viterra merger.


• Continental +1.2%: Expects tyre sales to fall slightly, notes limited impact on tariffs on auto parts.


• Adidas -0.8%, Puma -1.8%: US-Vietnam trade deal announced, details pessimistic.


• Currys +6.4% reported FY adj. pre-tax profit above expectations, aided by higher sales and tight cost controls despite inflation and wage pressures.


• Novartis' -0.8%: Phase III GCAPTAIN study of Cosentyx in giant cell arteritis did not meet the primary endpoint.

US Equity Futures: ES +0.1%, NQ +0.2%, RTY +0.5%

• US equity futures are posting modest gains into the day’s packed docket, with a divergence between the likes of value and growth names. Specifically, RTY is continuing to outperform tech heavy NQ, and ES, attempting to catch up on the latter’s YTD gains.


• US markets will be shutting early today due to the Independence Day market holidays, hence the packed data slate. The highlight is the US jobs report for June, where the pace of payroll growth is seen cooling to 110k from 139k, and the jobless rate is seen rising to 4.3% from 4.2%, there are also the weekly initial jobless claims data due to be released at the same time, expected to see an uptick. After that, S&P Global will release its final services and composite PMI data, before the ISM services report


• On the speakers' front, remarks are due from hawk Fed's Bostic (2027 voter), and Riksbank's Thedeen.

03 Jul 2025 - 10:00- ForexData- Source: Newsquawk