EUROPEAN EQUITY UPDATE: Stocks shrug off trade angst as focus falls on deadline extension

STOXX 600: U/C

• European bourses began the session on the front after a pre-cash open futures bid, though now trade either side of the unchanged mark as participants digest trade updates.


• On the trade front, US President Trump issued tariff letters to 14 countries. To keep it brief, these tariffs ranged from 25-40%, with Japan and South Korea given a 25% rate. At the other end of the spectrum, notable names include Thailand and Cambodia (36%), along with Indonesia and South Africa at 32% and 30% respectively. As such, we see names such as Pandora (-1.1%) under pressure in European trade given its reliance on Thailand as a manufacturer.


• As expected, the EU did not receive a letter, though reports yesterday suggested the US offered a deal to the Bloc for a 10% baseline tariff on EU goods with some exceptions for aircraft and spirits (Remy Contreau +4.0%, Pernod +2.9%).


• Focus for most countries will now shift towards the August 1st implementation day, where their respective teams can try to etch out a better deal.


• The day’s docket is light, French President Macron is travelling across the Channel to meet with PM Starmer, migration will be on the cards. Aside from this, we expect comments from ECB hawk Nagel at 15:00 BST.

Sectors: Mixed, modest negative bias

• Sectors opened mixed, with a narrow breadth which has since widened.


• At the top of the pile is Basic Resources, which is being boosted by trading giant Glencore, following commentary from JPMorgan, who suggested a potential 20% upside by December 2026.


• Towards the bottom of the list lies Retail, which is being weighed on amid the aforementioned US tariff letters and their impact on Asian manufacturing economies, a key destination for European retailers such as Pandora.

Individual Movers

• Glencore +3.1%: upgraded to Overweight at JPMorgan


• Entain +3.8%: Raised to Buy at BofA


• Zealand Pharma +3.3%: initiated with Overweight at Barclays, price target DKK 560


• Daimler Truck +1.6%: announces EUR 2bln share buyback, to run for 2yrs.


• Pandora -1.1%: Trump confirms 36% tariff on Thailand


• Rio Tinto +0.8%: Final CEO candidates are to present to the board in London this week

US: ES +0.1%, NQ 0.3%, RTY +0.3%

• Equity futures are posting modest gains, with outperformance in the RTY following its hefty losses on Monday.


• The US Day sees the release of the NFIB business optimism index for June and weekly RedBook. The NY Fed will release its latest Survey of Consumer Expectations; last month, median one-year ahead inflation expectations eased to 3.2% (prev. 3.6%), the three-year expectations fell to 3.0% (prev. 3.2%), while the five-year pared back to 2.6% (prev. 2.7%). In later trade, consumer credit stats for May are expected to fall to USD 10.50bln from USD 17.87bln in April.

08 Jul 2025 - 09:55- ForexGeopolitical- Source: Newsquawk