European Leaders Struggle to Adjust to Rising Defense Costs, EU Passenger Car Sale Growth Accelerated In May

Bridgette Randall
25 Jun, 2025
London

European markets edged higher in cautious trading amid heightened geopolitical tensions. 

Benchmark indexes in Frankfurt, Paris, Milan, and London edged higher after the risk of global crude oil and natural gas supply receded. 

Crude oil prices dropped more than 10% and fell to the level last seen on July 12, before the start of Israel's air strikes targeting nuclear infrastructure in Iran. 

NATO leaders are scheduled to wrap up their two-day talks in Brussels, Belgium, amid ongoing tensions in the Middle East and Russia's occupation of Ukraine.

Moreover, the U.S. president is pushing European leaders to take a larger burden of security expenses as the U.S. struggles with sky-high debt of $36 trillion. 

Defense stocks hovered near record highs amid expectations of higher government spending in the European Union. 

Passenger car registration in the European Union increased 1.6% from a year ago to 926,582 units, following a 1.3% rise in April, according to the monthly update from the European Automobile Manufacturers' Association. 

Battery-powered electric vehicle sales soared 25% from a year ago to 142,766 units, largely because of a 45% surge in sales in Germany. 

Overall registrations in the first five months of 2025 eased by 0.6% from a year ago to 4.6 million units.

 

Europe Indexes and Yields

The DAX index increased by 0.2% to 23,688.00, the CAC-40 index edged higher by 0.1% to 7,625.85, and the FTSE 100 index advanced 0.2% to 8,779.02.

The yield on 10-year German bonds inched lower to 2.51%, French bonds decreased to 3.20%, UK gilts moved down to 4.44%, and Italian bonds edged lower to 3.45%.

The euro decreased to $1.16; the British pound was higher at $1.36; and the U.S. dollar was lower and traded at 80.50 Swiss cents.

Brent crude increased $1.24 to $68.38 a barrel, and the Dutch TTF natural gas was higher by €0.15 to €35.21 per MWh.

 

Europe Movers 

BP plc increased 0.7% to 370.65 pence, Shell PLC advanced 0.7% to 2,600.50 pence, TotalEnergies SE 0.3% to €52.65, and Repsol SA added 0.4% to €12.57. 

Rolls-Royce Holdings PLC gained 1.4% to 922.0 pence, BAE PLC rose 0.7% to 1,815.50 pence, Rheinmetall AG advanced 1.4% to €1,709.50, and MTU Aero Engines AG decreased 0.3% to €372.40. 

Kering SA declined 0.7% to €179.70, LVMH rose 0.4% to €455.15, Hermes International SCA rose 0.1% to €2,279.0, and Moncler SpA declined 0.7% to €48.23.