EUROPEAN EQUITY UPDATE: Stocks grind higher on trade deal optimism

STOXX 600: +0.5%

• European bourses began the day with modest gains, and throughout the morning have continued to build, now posting gains of half a percent, with an absence of newsflow this morning to move the dial on the potentially positive US-EU trade deal.


• On the trade front, the EU is said to be nearing a trade deal with the US that would exempt some tariffs for commercial aircrafts; it would also give some relief to automakers, albeit mostly German ones, with other carmakers such as Ferrari potentially missing out on benefits as the deal may only aid companies with US factories. Spirits makers are also expected to receive a reprieve.


• The US President also touted copper and pharma tariffs, at potential 50% and 200% rates respectively. As such, the FTSE 100 and OMX Copenhagen underperform, given their respective exposure to the sectors via Novo Nordisk (-1.6%) and the UK’s miners.


• Ahead, we expect further trade announcements from the US, where seven countries are expected to be named in the US morning. Also, the BoE will release its bi-annual Financial Stability Report, and BoE Governor Bailey is due to deliver remarks in wake of the publication. The NBH's June meeting minutes are due and ECB chief economist Lane, ECB VP de Guindos, and ECB hawk Nagel feature on today's speakers' slate.

Sectors: Mixed, positive bias

• European sectors opened mixed, though now show a positive bias, moving in tandem with gains in the index.


• At the top lies banks, boosted by news that UniCredit raised its equity stake in Commerzbank to around 20%, becoming its largest shareholder. The bank said it plans to increase its holding to approximately 29% by converting remaining synthetic positions, following approvals from relevant authorities.


• At the foot of the pile, and by far the underperformer is Media, following an ugly profit warning from WPP. The comms giant reduced its revenue guidance, noting performance in June was worse than expected and the company sees this pattern continuing throughout the year. Publicis (-1.8%) have also fallen in sympathy.


• Basic Resources also underperforms, drilled lower after US President Trump floated the idea of a 50% copper tariff. As such, London copper prices have fallen, currently lower by 2.0%, denting London-based copper miners such as Antofagasta (-2.4%) and Glencore (-2.2%).

Individual Movers

• EssilorLuxottica +5.0%: META invests USD 3.5bln in the company.


• WPP -17.0%: Reduces revenue forecasts, says June performance was worse than expected, to continue to H2.


• UniCredit +3.0%: Raised its equity stake in Commerzbank (+1.0%) to around 20%, becoming the largest shareholder.


• Renk +5.7%: Working with advisers and may partially or fully sell sub-units of the civilian business

Bloomberg sources noted EU-US deal could impact:

• Commercial aircraft: Airbus (+1.7%)


• Auto names with US factories: Volkswagen (+0.3%), BMW (+1.5%), Mercedes Benz (+0.7%)


• Auto names without US factories: Ferrari (U/C) may miss out


• Liquor: Remy Cointreau (U/C), Pernod Ricard (U/C)

US: ES U/C, NQ U/C, RTY -0.1%

• US equity futures are lacklustre and trading around the unchanged mark, awaiting further clarity on the trade front.


• On trade, US President Trump said “at least” seven countries would be named regarding trade measures on Wednesday morning, with more to follow in the afternoon; US Commerce Secretary Lutnick expects 15-20 additional trade letters over the next two days.


• The data docket sees the release of weekly MBA mortgage applications data, additionally, wholesale sales and wholesale inventory revisions for May will be out. In afternoon trade, the FOMC will release minutes from its June meeting, which will be closely followed for the varied views on the economy and policy outlook discussed at the June 17-18th meeting, where policy was left unchanged via a unanimous decision.

09 Jul 2025 - 10:20- ForexResearch Sheet- Source: Newsquawk