European shares softer as EU mulls US | Money News

By Wayne Cole and Lucy Raitano

SYDNEY/LONDON (Reuters) -European shares have been softer on Monday as markets awaited developments in commerce talks, as effectively as a European Central Bank coverage assembly later this week, whereas U.S. futures have been brighter forward of some main tech earnings.

The European Union is exploring a broader set of attainable counter-measures towards the United States as prospects for an acceptable commerce settlement with Washington fade, based on EU diplomats.

Investors had been hoping for some progress in commerce talks forward of U.S. President Donald Trump‘s August 1 tariff deadline, with U.S. Commerce Secretary Howard Lutnick nonetheless assured a deal may very well be reached with the EU.

The pan-European benchmark STOXX 600 index was down 0.2% as was the UK’s blue-chip FTSE 100. The euro was 0.2% greater at $1.1652.

S&P 500 futures edged 0.2% greater, whereas Nasdaq futures have been up 0.3%. U.S. indexes are already round file highs in anticipation of more strong quarterly earnings experiences.

But tariff uncertainty can also be casting a shadow over markets, with Trump’s August 1 deadline fast approaching.

“Let’s say that tariffs are pushed off again from August 1, which I think is the rosiest outcome at this point, then I don’t think markets will spike another 10% higher. I’m thinking more that we get a grind higher for the rest of the year,” stated Oliver Blackbourn, multi-asset portfolio supervisor at Janus Henderson.

Markets, in the meantime, are gearing up for a host of large tech company outcomes this week, together with Google proprietor Alphabet, Tesla and IBM.

“They are going to be key for sentiment because frankly there’s not a lot else to drive things,” stated Michael Brown, senior analysis strategist at Pepperstone.

“We saw the banks deliver decent results last week, so you’d certainly be looking for the big tech names to keep up with that to reinforce the bull case (for equities),” he stated.

Investors additionally anticipate upbeat information for defence teams RTX, Lockheed Martin and General Dynamics. Higher authorities spending across the globe has seen the S&P 500 aerospace and defence sector rise 30% this yr, whereas defence shares in Europe have additionally hit file highs.

MARKETS UNFAZED BY JAPANESE POLITICS

The yen firmed on Monday as markets shrugged off the Japanese ruling coalition’s defeat in higher home weekend elections.

Japan’s ruling coalition misplaced control of the higher home in an election on Sunday, additional weakening Prime Minister Shigeru Ishiba’s grip on energy forward of the tariff deadline.