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European stocks opened the week on a positive note, buoyed by investor optimism as they continued to digest the volatility surrounding the Trump administration’s trade negotiations and the global growth outlook. At 03:05 ET (07:05 GMT), Germany’s DAX index rose by 0.3%, France’s CAC 40 gained 0.5%, and the UK’s FTSE 100 increased by 0.2%.
Recovery from Friday’s Decline
On Friday, European indices closed sharply lower, with the pan-European Stoxx 600 experiencing its worst session since April, after the White House imposed a range of new tariffs on countries worldwide effective August 1. However, investors appeared to buy the dip on Monday, especially in light of Friday’s weaker-than-expected U.S. nonfarm payrolls report, which raised expectations for a rate cut by the U.S. Federal Reserve next month.
Fed fund futures are currently pricing in approximately 60 basis points (bps) of rate cuts by December, up significantly from the 33 bps anticipated before Friday’s U.S. jobs data. Additionally, a rate cut in September is now 83% priced in, signaling growing expectations of monetary easing.
Quiet Day for European Economic Data
The economic data slate in Europe is largely empty on Monday, with the focus shifting to the U.S., where June factory orders could provide more insights into how corporate America is adjusting to the new tariff regime. Meanwhile, U.S. President Donald Trump announced on Sunday that a new statistician will be appointed following the firing of Bureau of Labor Statistics head, Erika McEntarfer. Trump accused McEntarfer of falsifying job numbers, though no evidence of data manipulation has been provided.
Q2 Corporate Results Continue to Roll In
The second-quarter earnings season is beginning to wind down, with fewer major corporate results expected on Monday. However, PostNL, the Dutch mail, parcel, and e-commerce company, reported a €24 million loss for the quarter. This followed a government rejection of financial support, which led to a €40 million impairment on its mail business, raising concerns over the company’s future.
In contrast, Senior, a manufacturer in the aerospace and automotive sectors, reported a 32% year-over-year increase in pre-tax profit for the first half of fiscal 2025. The growth was driven by higher revenue and operating margins in both its Aerospace and Flexonics divisions.
UBS also made headlines, announcing it would pay $300 million to settle outstanding obligations related to the misselling of mortgage-linked investments by Credit Suisse in the United States.
Investor Sentiment Remains Cautious
While the initial market optimism is palpable, investors remain cautious as they await further clarity on the U.S. trade policy and the Federal Reserve’s next steps. As tariff uncertainties continue to weigh on the global economy, the focus will remain on the central bank’s actions and how global corporate earnings continue to evolve in the face of ongoing trade tensions.
