Europe open: Stoxx 600 at two-month high ahead of ECB meeting
By Benjamin Chiou
Date: Thursday 24 Jul 2025
(Sharecast News) - European stocks were putting in strong gains on Thursday, with the Stoxx 600 at a two-month high, as investor optimism increased about a US trade deal ahead of a European Central Bank meeting.
The ECB, which will announce its policy decision at 1315 BST, is widely expected to keep interest rates on hold, though markets will be watching comments from ECB president Christine Lagarde, particularly given the recent rally in the euro.
"Several Governing Council members have already voiced discomfort with the euro's strength. If even a faint echo of that makes it into Lagarde's remarks, markets will interpret it as a dovish nod," said Stephen Innes, managing partner at SPI Asset Management.
The Stoxx 600 was up 0.6% at 553.46 early on - on track for its highest finish since 20 May - as gains of 1% or more in Frankfurt and Madrid provided a lift, countered by more modest performances elsewhere.
The euro was continuing to strengthen against the US dollar - rising back towards its year-to-date high of 1.1829 reached earlier this month - as hopes rise that EU officials can agree a trade deal with the US before the 1 August deadline.
According to the Financial Times, it is thought that a deal could be struck along similar lines with the deal with Japan announced on Wednesday, which slapped a 15% tariff on imports into the US.
Lee Hardman, analyst at MUFG, said that potential deal - if finalised as reported - would "help to dampen downside risks for European economies". Hardman said: "It is not clear if a trade deal will be officially announced ahead of today's ECB policy meeting. However, it should not have a significant impact on the ECB's immediate policy decision as they were already expected to leave rates on hold even before the latest trade news."
Economic data disappoints
The strong start for equities came despite a raft of disappointing economic data from Germany, which consumer confidence unexpectedly fell to a four-month low. The forward-looking GfK consumer climate indicator fell to -21.5 in August from -20.3 the previous month, missing the -19.2 consensus forecast.
Consumer willingness to spend money declined despite ongoing improvements in income expectations, while saving preferences reached their highest in nearly one and a half years. Economic expectations, meanwhile, suffered a "severe setback" due to ongoing uncertainty around the economy and the impact of US tariffs.
The flash readings of eurozone purchasing managers' indices (PMIs) for July came in mixed. The overall eurozone composite PMI rose to 51 from 50.6 in June, though the German composite PMI unexpectedly weakened and the French composite PMI remained below the neutral 50-point level for the 11th straight month (albeit showed an improvement over the month).
Market movers
Finnish oilfield services group Neste was a high riser, jumping 15% after topping analysts' forecasts with second-quarter profits, helped by strong demand in its sustainable aviation fuel operations.
Reckitt Benckiser also jumped after the consumer products group upgraded the full-year revenue growth target for its core brands as it posted a better-than-expected jump in second-quarter like-for-like sales.
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