Lower Borrowing Costs in the Euro Area Following German Inflation Data
Bond yields in the Euro zone are experiencing further decreases this morning after the release of German inflation figures.
The consumer price index for June in North-Rhine Westphalia, Germany’s key industrial region, registered an annual increase of 1.8%, down from 2% in May, and a monthly drop of 0.1%. The preliminary national inflation figures will be published later today.
The 10-year German bond yield, a benchmark for the Euro area, fell by over 2 basis points to 2.57%. Similarly, the 2-year German yield also saw a decline of 2 basis points, standing at 1.85%.
— Jonathan Stayton, Jenni Reid
Fed’s Bostic on Uncertain Inflation Outlook
Atlanta Fed President Raphael Bostic stated that the U.S. Federal Reserve will likely lack the necessary clarity on the economy’s direction to support an interest rate cut in July, during an interview on CNBC’s “Squawk Box Europe.”
“We will only have one more inflation measure available. Many unknowns will remain regarding how existing policies are affecting the labor market. Without clarity, it’s difficult to justify any policy adjustments at this time,” Bostic mentioned.
Bostic noted that the Fed will closely observe the reactions of businesses and consumers to tariffs and other economic changes. “I’m hearing from more businesses that they don’t expect this situation to resolve and clarify until possibly 2026, indicating a much longer timeline than many anticipate,” he added.
— Jenni Reid
European Stock Markets Show Slight Gains
European stocks opened slightly higher on Monday, with the Stoxx 600 index increasing by 0.1% in early trading, following last week’s upward trend. Global market sentiment appears generally positive, although stocks in the Asia-Pacific region are mixed and U.S. futures remain positive.
In Europe, sector performances vary, with autos down 0.6% and banks falling by 0.25%, though financial services are up by 0.6%. Companies benefitting from the recent U.K.-U.S. trade deal, which commenced today, are making slight gains, following strong pre-announcement increases. For example, Rolls-Royce is up 0.6%, while BMW saw a 0.26% increase, although Aston Martin shares dropped 0.1%. The FTSE 100 in the U.K. is also up 0.1%.
U.K. Stocks and Sterling Strengthen with U.S. Trade Deal Implementation
The British pound, which recently reached a nearly four-year high against the U.S. dollar last week, is up 0.1% this morning, trading at approximately $1.373. Futures data suggests positive starts for both the FTSE 100 and FTSE 250.
This Monday marks the beginning of the trade agreement between the U.K. and the U.S., which was finalized last month. Notable aspects of the deal include a reduction in British car export tariffs from 27.5% to 10%, as well as the elimination of duties on aerospace products, such as engines and aircraft parts.
However, there remains a baseline 10% tariff, and an outlined agreement regarding zero tariffs on core steel products has yet to be finalized. Meanwhile, the U.K.’s statistics agency confirmed that the nation’s economic growth for Q1 2025 was 0.7%, consistent with earlier estimates.
— Jenni Reid
Market Opening Calls
Welcome to CNBC’s live blog featuring updates on European financial markets and significant regional and global business news, data, and earnings. Futures data from IG indicates a positive opening for European markets, with London’s FTSE projected to open stable at 8,794, Germany’s DAX expected to rise 0.3% to 24,104, France’s CAC 40 also up 0.3% at 7,709, and Italy’s FTSE MIB expected to climb 0.2% to 39,911.
This optimistic outlook in Europe follows a similar sentiment in Asia-Pacific markets overnight as investors evaluated details concerning trade negotiations alongside recent data, including Japan’s industrial output figures for May and China’s manufacturing results for June.
In the U.S., stock futures also rose early Monday, as investors aim to close out an active month for stocks, even amidst uncertainties surrounding global trade negotiations.
— Holly Ellyatt
Anticipated Data for Today
Traders in Europe will be focusing on the latest inflation figures from Italy and Germany, along with German retail sales data, as potential indicators of inflationary trends and consumer confidence.
Additionally, traders will be analyzing data from China that revealed a contraction in manufacturing activity for the third consecutive month in June, despite stimulus efforts from Beijing aimed at stabilizing key sectors.
— Holly Ellyatt
