European markets kicked off the week with strong gains, fuelled by optimism over progress in U.S.-China trade talks and easing geopolitical tensions.
While traders are celebrating the early rally, caution is still advised as key details remain unclear.
European Stocks Surge on Trade Buzz
European equities opened higher on Monday:
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Germany’s DAX: up 1.8%
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France’s CAC 40: up 1.3%
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U.K.’s FTSE 100: up 1%
The rally was driven by reports that Washington and Beijing reached a preliminary trade agreement over the weekend.
Although no official details have been confirmed, both parties have hinted at a joint announcement later today.
👉 Trade245 traders should note: The markets are reacting to sentiment more than facts right now. Neither side has yet addressed the tariff levels imposed in April, which means risks remain.
Global Geopolitics Ease, Boosting Risk Appetite
In addition to the trade optimism, global geopolitical tensions have cooled slightly:
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India and Pakistan’s ceasefire is holding steady.
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Ukraine’s President Zelenskiy is set to meet Russian President Putin in Turkey on Thursday, raising hopes for progress.
These developments have reduced risk premiums across multiple asset classes, lifting stocks, oil, and other risk-on assets.
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ECB Rate Cut in Focus as Eurozone Data Weakens
Although Monday’s data calendar was quiet, traders are gearing up for a busy week, with Q1 eurozone GDP and inflation figures due.
Markets are currently pricing in a 90% chance of another European Central Bank (ECB) rate cut in June, following seven cuts over the past year as inflation remains weak.
👉 ECB policymakers continue to signal that more easing is possible if growth and inflation keep disappointing.
Corporate Highlights: Winners and Losers
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UniCredit delivered a strong Q1 2025, posting a record €2.8 billion net profit, up 8.3% year-on-year thanks to higher trading income and fees.
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Salzgitter, the German steelmaker, missed expectations, citing ongoing weakness in European demand.
For Trade245 traders, this highlights how corporate earnings remain sensitive to the global macro backdrop, especially in cyclical sectors like banking and manufacturing.
Oil Prices Rally on Trade Optimism
Oil markets are also rallying alongside equities:
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Brent crude: up 2.1% to $65.27 per barrel
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WTI crude: up 2.1% to $62.29 per barrel
Both benchmarks extended last week’s 4% gains as traders hope an end to the U.S.-China trade war will boost global oil demand.
The Trade245 Takeaway: Bulls Are Back, But Stay Tactical
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Markets are rallying on headlines, but the real details of any U.S.-China deal are still unknown.
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ECB rate cut expectations are strengthening, which could continue to support European equities and bonds.
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Keep an eye on this week’s eurozone data and key corporate earnings for confirmation of the recovery story.
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