European stock markets are set for a strong opening on Thursday, with major indices poised for significant gains as investor optimism swells around the prospect of an imminent trade deal between the United States and the European Union.
This positive sentiment, fueled by a recent US-Japan pact and hints from President Donald Trump, is overshadowing a mixed bag of corporate earnings reports.
Futures data from IG points to a robust start across the continent: London’s FTSE 100 is seen opening 0.4% higher, France’s CAC 40 is projected to jump 1.3%, Germany’s DAX is up 1.1%, and Italy’s FTSE MIB is expected to open 1.24% higher.
This surge in optimism follows a rise in European markets on Wednesday, which was sparked by a Financial Times report suggesting that the two major trading partners were closing in on a 15% tariff deal.
Hopes that an agreement was close intensified after President Donald Trump, having just announced his “massive Deal” with Japan, hinted that Europe could be next. “We have Europe coming in tomorrow, and the next day, we have some other ones coming in,” Trump said late on Tuesday, without providing specific details.
A barrage of earnings: Deutsche Bank beats, TotalEnergies falters
Thursday is a busy day for both corporate and economic news. On the earnings front, a host of major European companies are set to report, with early releases presenting a mixed picture.
- Deutsche Bank: The German banking giant beat expectations on its bottom line, reporting a net profit attributable to shareholders of 1.485 billion euros ($1.748 billion) for the second quarter.
This comfortably surpassed the 1.2 billion euro forecast from Reuters and marks a significant turnaround from a loss of 143 million euros in the same quarter of 2024, when earnings were hit by legal provisions.
The bank also said it was on track to meet its full-year targets, despite mixed results within its key investment banking unit and the impact of the euro’s strength against the US dollar, which Chief Financial Officer James von Moltke described to CNBC’s Annette Weisbach as the “big thing that’s kind of flowing through our numbers.”
- TotalEnergies: French oil giant TotalEnergies reported a significant fall in its second-quarter earnings, a result of lower prices for oil and liquefied natural gas. The energy major posted a second-quarter adjusted net income of $3.6 billion, reflecting a 23% drop from the same period a year earlier.
The figure was roughly in line with the $3.62 billion that analysts had expected, according to an LSEG-compiled consensus. The company also confirmed it would continue its share buyback program, with up to $2 billion in buybacks planned for the third quarter.
A flood of other major earnings reports are also due today from companies including BNP, Roche, Nokia, Nestle, Lloyds Banking Group, BT Group, LVMH, and many more.
UK-India trade pact and Central Bank watch
In other trade news, the United Kingdom is set to sign its trade agreement with India today, coinciding with Indian Prime Minister Narendra Modi’s visit to the country.
UK officials say the deal will add almost £5 billion ($6.8 billion) to the British economy. Under the agreement, India’s average charge on UK goods will fall from 15% to 3%, while Indian manufacturers will gain greater access to the UK market.
It’s also a big day for central bank watchers. The European Central Bank is widely expected to keep its interest rates unchanged today as it continues to gauge the evolving trade tariff landscape.
On the data front, flash European purchasing managers’ index (PMI) data and Germany’s GfK consumer confidence figures are due for release, which will provide further insights into the health of the eurozone economy.
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