European Markets Remained Optimistic Despite Uncertain U.S. Trade Outlook

Bridgette Randall
04 Jul, 2025
London

European markets lacked direction on Friday after a week of choppy trading amid growing uncertainty about the U.S. trade policy. 

Benchmark indexes in Frankfurt, Paris, Milan, and London edged lower, as the European Union trade negotiators signaled a lack of progress in trade talks with the U.S. 

The European Union is looking to avoid steep tariffs of 25% on vehicles and parts and additional duties on steel, aluminum, and food and beverage products. 

Separately, China's Commerce Ministry said it plans to impose a 34.9% duty on EU brandy imports starting July 5. 

On the economic front, Germany's factory orders adjusted for inflation rose 5.3% from a year ago in May, according to the latest data released by the Federal Statistical Office. 

On a monthly basis, new manufacturing orders decreased 1.4% and reversed the upwardly revised 1.6% increase in the previous month. 

Excluding large orders, new orders declined 3.1% from the previous month. 

In a less volatile three-month comparison, new orders in the three months to May advanced 2.1% from the previous three months; excluding large orders, they rose by 1.9%. 

 

Europe Indexes and Yields

The DAX index decreased by 0.3% to 23,855.18, the CAC-40 index edged lower 0.8% to 7,693.87, and the FTSE 100 index declined 0.2% to 8,801.82.

The yield on 10-year German bonds inched lower to 2.54%, French bonds decreased to 3.25%, the UK gilts moved down to 4.52%, and Italian bonds edged lower to 3.45%.

The euro increased to $1.18, the British pound was lower at $1.37, and the U.S. dollar was lower and traded at 79.36 Swiss cents.

Brent crude decreased $0.09 to $68.55 a barrel, and the Dutch TTF natural gas was higher by €0.22 to €33.93 per MWh.

 

Europe Movers 

Rheinmetall AG advanced 0.8% to €1,711.50, Safran SA declined 0.8% to €268.10, BAE Systems fell 0.3% to 1,871.0, Rolls-Royce Holdings PLC edged up 0.1% to 955.0 pence, and Airbus SE decreased 0.9% to €175.16. 

HSBC Holdings declined 0.1% to 883.70 pence, Barclays PLC fell 0.3% to 331.55 pence, Credit Agricole SA decreased 0.9% to €16.01, and UniCredit SpA dropped 0.7% to €56.70.