European Markets Advanced as Israel-Iran War Entered Fourth Day

Bridgette Randall
16 Jun, 2025
London

European markets advanced in cautious trading amid escalating tensions in the Middle East and ahead of rate decisions from major central banks. 

Benchmark indexes in Frankfurt, Paris, Milan, and London edged higher as investors overlooked Middle East tensions. 

Iran and Israel exchanged missile attacks for the fourth day in a row as both countries targeted military and nuclear infrastructure. 

Crude prices jumped more than 3% after Iran threatened to close the Strait of Hormuz, impacting the global supply of crude oil. 

The Bank of England, the Federal Reserve, and the Bank of Japan are scheduled to announce their rate decisions later in the week. 

Three major central banks are expected to hold rates amid rising crude oil prices and uncertainty linked to the U.S. trade policy.

 

Europe Indexes and Yields

The DAX index increased by 0.3% to 23,590.74, the CAC-40 index edged higher by 0.3% to 7,711.76, and the FTSE 100 index advanced 0.2% to 8,869.65.

The yield on 10-year German bonds inched higher to 2.58%, French bonds increased to 3.29%, UK gilts moved up to 4.58%, and Italian bonds edged higher to 3.52%.

The euro increased to $1.16; the British pound was higher at $1.36; and the U.S. dollar was higher and traded at 81.29 Swiss cents.

Brent crude increased $0.55 to $74.78 a barrel, and the Dutch TTF natural gas was higher by €0.76 to €38.31 per MWh.

 

Europe Movers

Renault declined 7% after the vehicle maker confirmed that its chief executive, Luca De Meo, would step down. 

Several analysts speculated that Meo is likely to take the helm of the fashion house as early as next month, driving Kering's stock higher. 

Kering SA jumped 9.9% to €189.74, and Renault SA fell 7% to €40.05. 

Airbus SE inched 0.3% higher to €162.04 after the company's chief executive, Guillaume Faury, confirmed muted orders at this week's Paris Air Show, following the crash of an Air India Boeing Dreamliner last week. 

Industry analysts are estimating a sharp fall in annual orders to between 700 and 800, from 1,300 in 2023, amid ongoing supply chain woes and macroeconomic uncertainty.