European equity markets showed little movement Tuesday as investors remained cautious ahead of the U.S. tariff deadline on July 9 and the release of important inflation figures.
By 07:05 GMT, Germany’s DAX edged up 0.1%, France’s CAC 40 gained 0.1%, and the UK’s FTSE 100 rose 0.3%.
Trade deal optimism underpins markets
Global markets have been lifted by hopes that the Trump administration will finalize several trade agreements before next week’s deadline, following last week’s confirmation of a trade deal with China. Canada’s recent removal of its digital services tax on tech firms, aiming to revive stalled U.S. talks, has also bolstered sentiment.
However, tensions remain as U.S. President Donald Trump criticized Japan, calling it “spoiled,” amid ongoing negotiations. Meanwhile, U.S. Treasury Secretary Scott Bessent warned that tariffs could still rise sharply even while talks continue, though he anticipates a flurry of deals before the deadline.
European Commission President Ursula von der Leyen expressed confidence last week that a deal with the U.S. could be reached by July 9. If no agreement is made, the U.S. plans to impose a 50% tariff on nearly all EU goods, with Europe prepared to respond with its own countermeasures.
Inflation data in focus
Market participants are closely watching the release of preliminary eurozone inflation data expected Tuesday. Analysts forecast consumer price inflation hit 2% year-on-year in June, aligning with the European Central Bank’s target.
Earlier this month, the ECB cut interest rates for the eighth time in a year but suggested it may pause further reductions due to uncertainties from U.S. trade tensions. Since last June, the ECB has cut rates by two percentage points to support the eurozone economy, which has been pressured by both internal challenges and external shocks from U.S. policy shifts.
Later Tuesday, manufacturing Purchasing Managers’ Index (PMI) data for France, Germany, and the eurozone will provide insight into the sector’s health.
Corporate updates
Sodexo (EU:SW) lowered its outlook for fiscal 2025 revenue growth to the low end of its previously forecast range, citing mixed regional results and currency pressures in its Q3 report. The company reaffirmed its guidance of 3%-4% organic revenue growth and a 10-20 basis point rise in operating profit margin but now expects to achieve the lower end of those targets.
French automaker Renault (EU:RNO) announced an extraordinary loss of about €9.5 billion ($11.2 billion) in the first half related to its stake in Nissan (USOTC:NSANY), due to changes in how it accounts for the investment.
J Sainsbury (LSE:SBRY) reported a 4.9% rise in retail sales excluding fuel for the first quarter of 2025/26, reaching its highest market share in nearly ten years.
Oil prices rebound from three-week lows
Crude oil prices recovered slightly Tuesday after hitting three-week lows, pressured by easing supply concerns and anticipation of an OPEC+ production increase.
Brent crude futures rose 0.3% to $66.91 a barrel, bouncing from a June 11 low just before the Israel-Iran conflict began. U.S. West Texas Intermediate crude futures increased 0.2% to $65.25 a barrel.
OPEC+ is scheduled to meet on July 6, and reports indicate the group will boost output by 411,000 barrels per day in August, following production increases in May, June, and July. This would bring the total 2025 supply hike to 1.78 million barrels per day, although it remains below the total production cuts implemented over the past two years.
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