EUROPEAN EQUITY UPDATE: Stocks mixed whilst US-Sino trade talks have been confirmed and as traders await the FOMC

STOXX 600: -0.3%

• European bourses opened mostly lower and have traded sideways throughout the morning thus far.


• There have been a few updates to keep traders busy; 1) US and China are set to hold talks in Switzerland over trade, 2) China announced new monetary policy easing measures amid global economic uncertainty; the PBoC is to cut its RRR by 50bps and reduce its 7-day reverse repo by 10bps (other measures were also announced), 3) India launched air strikes on Pakistan.


• The European day has not included anything too notable thus far; German Industrial Orders printed above expectations, whilst the EZ Construction PMI lifted from the prior. EZ Retail Sales printed a little shy of expectations. Focus today will ultimately be on the FOMC later in the day.

Sectors: Mixed

• European sectors are mixed and with the breadth of the market fairly narrow aside from the top/bottom performers.


• Autos parks itself at the top spot, with gains facilitated by post-earning strength in BMW (+3.5%); the Co. reported a 25% earnings drop amid heightened Chinese competition – nonetheless, it topped expectations on both Net Income and Automotive EBIT. Sentiment may also be lifted after the automakers opted to maintain guidance for the FY (as a reminder, rivals such as Stellantis/Mercedes-Benz suspended their guidance in the past month).


• Healthcare is found near the foot of the pile, building on the pressure seen across US vaccine-makers in the prior session. This is as the sector reacts to the FDA appointing Vinay Prasad as its new vaccine chief – in the past, the new appointee has been an outspoken critic of the FDA’s decision to approve COVID-19 shots for children. Andrew Tsai, an analyst at Jefferies, has suggested that his appointment could raise the bar for companies to get approvals for new treatments. The likes of GSK (-3%), AstraZeneca (-2.5%) and other vaccine makers have moved lower.


• Sticking with healthcare, Novo Nordisk reported its Q1 results today – which were generally underwhelming. The obesity drug maker reported a mixed set of headline metrics, and cut its FY25 Sales Growth guidance by more than expected – noting that it cut guidance due to lower-than-planned branded GLP-1 penetration. Further weighing on sentiment, the Co. said it would not be conducting a buyback programme in 2025. Nonetheless, Novo Nordisk shares currently trade higher by around 5% - perhaps a testament to some of the significant losses seen YTD (-27%).


• Shipping names are broadly in the red and towards the bottom of the STOXX 600 index; Maersk (-4%), Hapag Lloyd (-3.9%). The downside can be attributed to US President Trump saying Houthis decided that they "don't want to do this anymore" and that he told the military to stop attacks against Houthis – the militant group has since rejected those claims.

Movers: DAX 40 +0.1%, FTSE 100 -0.4%, CAC 40 -0.5%

• To mention some other key stories; BAE Systems (-0.8%, affirmed guidance; does not expect tariff impact), Orsted (-1.7%, cancels UK offshore wind project), Fresenius (U/C, in-line metrics; affirmed guidance), Siemens Healthineers (-1.1%, miss on Sales and cut guidance), LVMH (-0.4%, US President Trump met with CEO Arnault but details are light at this time).

US Equity Futures: ES +0.4%, NQ +0.5%, RTY +0.5%

• Futures are broadly in the green, with sentiment lifted as the region reacts to the latest US-China trade updates and after China’s latest monetary policy package.


• Focus today will be on the FOMC; the Federal Reserve is expected to keep rates steady at 4.25–4.50%. No updated economic projections will be released (these are next due in June). Markets currently assign only a 2% chance of a 25bps rate cut at this meeting, with 78bps of easing priced in by year-end. Attention will be on the Fed’s commentary regarding the economic impact of recent US tariffs and any guidance offered.

07 May 2025 - 10:15- ForexData- Source: Newsquawk