EUROPEAN EQUITY UPDATE: Stocks incrementally firmer whilst US players return from a long weekend

STOXX 600: +0.5%

• European bourses opened incrementally firmer, but sentiment improved in tandem with a pick-up in US equity futures. Indices currently reside at session highs.


• Drivers for the lift in sentiment have been limited, but it does continue the positive tone seen in the prior session. As a reminder, US President Trump postponed the 50% EU tariffs until July to allow more time for trade negotiations.


• Overnight, European Trade Commissioner Sefcovic said he had a good call with US Commerce Secretary Lutnick on Monday. And more recently, Bloomberg sources suggest the EU is set to focus on critical sectors in a bid to avoid US tariffs.


• Docket today has included; French inflation data (weaker-than-expected), German GfK (improved from the prior as expected) and commentary via ECB’s Villeroy who suggested that interest rate normalisation within the EZ is probably incomplete. Focus now turns to EZ Sentiment data and then ECB’s Nagel later in the day.

Sectors: Positive

• European sectors hold a strong positive bias, with only a handful of industries residing in the red.


• Financials take the top spot, joined closely by Travel & Leisure and then Industrials. The latter buoyed by continued strength in Defence names, following Trump’s hawkish remarks on Putin following Russia’s large-scale attack on Ukraine over the weekend.


• Utilities lag, with Basic Resources also marginally pressured by broader losses in the metals complex.

Majors: FTSE 100 +0.9%, DAX 40 +0.6%, CAC 40 +0.2%

• The FTSE 100 outperforms in Europe today, as the index plays catch up to the strength seen across peers on Monday, where the UK was off on holiday. Stock specifics have been relatively light for the index today; defence names are generally towards the top of the pile in reaction to US President Trump calling his Russian counterpart “crazy” over the weekend. Mining names have been pressured by broader weakness in underlying metals prices.

US Equity Futures: -ES +1.3%, NQ +1.4%, RTY +1.1%

• Futures are entirely in the green as US traders return from holiday. Price action this morning has really only been upwards, with contracts generally near session highs.


• Fed’s Kashkari provided some remarks today; he highlighted that there is a healthy debate amongst FOMC member over whether to "look through" the inflationary impact of new tariffs – his own view is that arguments against looking through tariff-induced inflation are more compelling.


• Today's US data releases include durable goods data for April is seen -7.8% M/M (prev. 7.5%), while the ex-transport measure is seen -0.1% M/M, and the ex-defence measure is seen -0.2% M/M); the Conference Board's gauge of US consumer confidence for May (seen rising to 87 from 86).

27 May 2025 - 09:55- ForexData- Source: Newsquawk