EUROPEAN EQUITY UPDATE: Stocks pare a little of Friday's dovish gains with a lack of fresh catalysts

STOXX 600: -0.2%

• European bourses have begun the week on the backfoot, with focus on Friday’s dovish remarks from Fed Chair Powell amid light newsflow.


• The STOXX 600 currently trades towards the lower end of Friday’s 558-563 range, where stocks and bonds rallied amid bets of further Fed easing. Markets now price 53bps of Fed easing by year end (pre-speech 48bps, post speech 55bps).


• On the European central banking front, Reuters sources said rate cut talk could resume after a potential September pause should the economy weaken; 3bps of easing is expected in November, 9bps by year end. At Jackson Hole, ECB President Lagarde said Europe’s labour market has remained resilient despite severe inflation shocks and aggressive rate hikes.


• In eastern Europe, Ukraine’s PM discussed security guarantees with US special representative Kellogg, and Ukrainian drones attacked an industrial facility in Russia’s Samara region which sparked a fire at Russia’s Novatek Ust-Luga terminal.


• The docket is light on Monday, with the only notable data release coming from Germany’s Ifo, there was no reaction seen on the mostly firmer metrics.


• The week ahead features US PCE, PBoC MLF, Minutes from ECB and RBA, Australia's CPI, Japan Tokyo CPI, and Canada GDP; on the earnings front, NVDA will report on Wednesday after the US market closes.

Sectors: Mostly Negative

• Sectors opened mostly in the red, only a few remaining afloat including Banks, media along with Travel & leisure.


• At the bottom of the pile is Utilities due to notable losses in wind names Vestas (-4%) and Orsted (-17%), powered lower after the latter received offshore stop-work order from US BOEM, the name also confirmed it would continue with its rights issue after this order; note, this was an announcement which pushed shares lower by around 30% intraday this month. Additionally for the sector, RWE (-2%) was downgraded to hold by Kepler.

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

• US futures are faring a little better than those across the Atlantic.


• RTY outperforms, trading around the unchanged mark for most of the morning, while ES and NQ are posting very modest losses in a pullback from Friday.

25 Aug 2025 - 10:00- Fixed IncomeData- Source: Newsquawk