Image Source: Reuters
European futures dropped marginally on Thursday, May 15, 2025, as investors balanced contradictory cues from US inflation data, the recent US-China trade cease-fire, and sector-specific news on the continent. Euro Stoxx 50, DAX, and FTSE futures indicated a subdued market sentiment, with profit-taking and sector rotation dictating the session following a sharp rally during the previous week.
Euro Stoxx 50 Futures Down 0.2%
Euro Stoxx 50 futures declined 0.2% at the start of trading, following a wider deceleration in global equity strength. The index is up more than 9% this year, having hit an all-time high of 5,568.65 in March, but investors are now taking profits and re-evaluating risks as US policy and European corporate exposures continue to be in the spotlight.
DAX Futures Fall, Technicals Indifferent:
DAX futures traded most recently at 23,530.5, declining 56.5 points or 0.24%. Intraday indicators point to a "sell" on shorter-term charts, but a "buy" on the day chart, indicating vagueness regarding the next direction. The DAX is 10% higher for the year with industrials and exporters leading gains, but holding near resistance at 23,585 and support at 23,515.
FTSE Futures Stable After Conflicting UK Data
FTSE 100 futures were flat to slightly down after British equities closed Tuesday in a mixed manner. Investors are processing a tick higher in US inflation and indications of a slowing UK labor market, which may impact the Bank of England's future rate actions. Industrial miners and energy stocks were the leaders, while consumer and healthcare names trailed. Shell paced the FTSE 100 with a 1.2% advance, but DCC and GSK pulled the index down.
Sector Moves and Corporate News:
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European banks were up, with Santander, UniCredit, and ING rising more than 1%.
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Consumer discretionary and luxury shares were volatile, with LVMH, Kering, and L'Oreal posting significant losses.
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Healthcare shares declined as US President Trump's proposal to cap drug prices squeezed global pharma giants such as Sanofi and Bayer.
Macro and Global Context:
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The US-China 90-day trade truce, encompassing tariff cuts and a suspension of new barriers, has lifted global sentiment but also triggered caution as investors look for more lasting solutions.
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US S&P 500 futures declined 0.2%, and Asian markets were generally weaker, adding to the risk-off tone in Europe.
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The euro and major currencies were unchanged, with the euro at $1.1179.
Insight
European markets are taking a breather after a robust pace, with traders locking in profits and repricing sector risk in the face of continued macro uncertainty. The US-China trade ceasefire has been a temporary lift, though with inflation and central bank policy still in limbo, and sector-specific headwinds (particularly in healthcare and consumer stocks), positioning remains lightfooted. Technicals for both DAX and Euro Stoxx 50 imply more consolidation before the next large-scale move.
"European stocks closed modestly lower, ending the week's strong equity momentum as markets took profits and continued to weigh risks to the European corporate environment from outstanding tariffs by the US."
Source: Investing.com, Live Index, Reuters, Trading Economics, Eurex, Economic Times
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