EUROPEAN EQUITY UPDATE: Tentative trade as tariff deadline looms, miners firmer on China dam announcement

STOXX 600: U/C

• A mixed start to the week. STOXX 600 began trade tentatively ahead of the US tariff deadline (Updates on Friday suggested min. 15-20% on all goods). Throughout the morning, some modest pressure seen across indices. Though with losses capped by strength in UK miners, which are being helped after news that China is to build a dam three times the size of the historic Three Gorges.
• On China, Premier Li announced that construction had begun on a mega-dam located in Tibet, which has an estimated cost of at least USD 170bln. As such, China’s Construction & Engineering Index jumped to a seven month high, and metals are boasting large gains; also helping the FTSE 100 stay afloat. In terms of some commentary surrounding it, Citi said, assuming a ten year construction, the investment/GDP boost could reach USD 16.7bln for a single year.
• Elsewhere in Europe, the FTSE MIB (-0.9%)underperforms after automaker Stellantis (-1.4%) said it expects an H1 net loss of USD 2.7bln due to restructuring and tariff impacts.

Sectors: Mixed

• Hold onto the positive bias shown at the open.
• At the top of the pile, and the clear outperformer is Basic Resources (+3.7%), amid the aforementioned Tibet dam news.
• Also performing well is Travel and Leisure (+1.6%), after 13% weighting Ryanair’s (+6.5%) profits were boosted by a 21% rise in air fares. The company’s Q1 net profit more than doubled to EUR 819mln (vs EUR 360mln Y/Y), and passenger numbers also rose 4% to 57.9mln; it also noted heavily delayed Boeing (BA) deliveries, though it remains confident that the remaining 29 737Max orders will be delivered ahead of Summer 2026.
• At the bottom of the pile is Banks (-0.8%), led lower by the notable downside in yields this morning, which are helped following the Japanese Upper House election. (See Fixed for more).

Individual Movers

• Boliden +6.0%: Upgraded at Berenberg
• Galp +2.5%: Upgrades EBITDA and OFC expectations.
• Vivendi +4.0%: Upgraded at Kepler
• Sixt -4.1%: EU said to force car rental companies to purchase EVs only from 2030
• Stellantis -1.4%: Sees net loss of USD 2.7bln due to restructuring, tariff impacts.
• Vestas -3.7%: Downgraded at Kepler
• Roche -0.5%: Astegolimab phase 3 study did not meet primary endpoint

US: ES +0.3, NQ 0.3%, RTY +0.7%

• US equity futures are firmer across the board. RTY outperforms on the previously mentioned lower yields.
• The data docket ahead is light. The US leading index is seen rising +0.1% M/M in June (prev. -0.1%), Canada will report June PPI and RMPI data and the BoC will release its business outlook survey and SCE. Notable US corporates reporting today include VZ, ROP, NXPI, CLF, STLD. Attention for the rest of the week will likely be on earnings including VZ, KO, T, GOOGL, TSLA, HON, and PMIs. Note, Fed blackout has begun; remarks from Fed Chair Powell (who will give opening remarks at a regulatory conference) and Fed Governor Bowman on Tuesday will likely not touch on any monetary policy updates.