14th Jul 2025 12:09
(Alliance News) - The FTSE 100 shone in early afternoon dealings, though trade on Monday was marred by a decline in mainland European equities on tariff worries after an unnerving announcement from US President Donald Trump over the weekend.
The FTSE 100 index rose 35.71 points, 0.4%, to 8,976.83. The FTSE 250 was up 59.65 points, 0.3%, at 21,672.90, and the AIM All-Share was up 2.98 points, 0.4%, at 776.53.
The Cboe UK 100 was up 0.5% at 895.49, the Cboe UK 250 added 0.4% to 19,139.32, while the Cboe Small Companies added 0.3% to 17,453.77.
In European equities on Monday, the CAC 40 in Paris fell 0.5%, while the DAX 40 in Frankfurt gave back 0.9%.
Equities in New York are called to open lower. The Dow Jones Industrial Average and S&P 500 are called down 0.3%, and the Nasdaq Composite down 0.4%.
The yield on the US 10-year Treasury was quoted at 4.42% early Monday afternoon, stretching from 4.41% at the time of the European equities close on Friday. The yield on the US 30-year Treasury was quoted at 4.97%, widening from 4.93%.
The EU still hopes to strike a deal with the US despite President Trump's ramped-up threat of 30% tariffs, the bloc's trade chief said Monday, with pressure on Brussels to toughen its stance.
The US leader threw months of painstaking talks into disarray on Saturday by announcing he would hammer the bloc with the sweeping tariffs if no agreement is reached by August 1.
Heading into Brussels talks with EU trade ministers, the bloc's trade chief Maros Sefcovic said despite Trump's latest threat he "felt" Washington was ready to continue negotiating – and he planned to speak with his US counterparts later in the day.
Analysts at Barclays commented: "If the US were to increase tariffs on EU goods up to 30%, we would expect retaliation from the EU, a more prolonged and deeper economic slowdown, the ECB to cut policy rates to 1% by Q1 26, lower EUR core rates, EURUSD to come under pressure and the EU equity market resilience to be put to the test.
"While we do not foreclose the possibility that the US and EU can still reach a provisional agreement by August 1 that maintains the average tariff on most EU goods at 10%, we think it may be more likely than not that the tariff on the EU increases from 10%, but short of 30%. We also expect more sectoral tariffs to be announced, which could cover a large fraction of EU exports to the US."
Among those on the decline in Europe were wines and spirits firm Pernod Ricard, down 1.9%, and luxury goods company LVMH, 1.8% lower.
The pound fell to USD1.3487 early Monday afternoon, from USD1.3503 at the time of the London equities close on Friday. The euro faded to USD1.1689 from USD1.1699. Against the yen, the dollar edged down to JPY147.25 from JPY147.34.
Societe Generale analyst Kit Juckes believes the future of Federal Reserve Chair Jerome Powell also warrants market attention.
"236 years ago, a hungry mob stormed the Bastille, decapitated its commander, freed the 7 prisoners held inside and effectively started the French revolution. A successful campaign to push Fed Chair Jay Powell out of his role wouldn't be as dramatic, but would leave deep scars on financial markets, obliterating any dollar-positive impact of further increases in import tariffs along the lines of the 30% levels mooted for the EU and Mexico, starting August 1," Juckes said.
The uncertain mood on Monday lifted gold prices, boosting Fresnillo 3.5% and Hochschild by 3.6% in London.
Gold rose to USD3,370.83 an ounce midday Monday, from USD3,364.33 at the time of the London equities close on Friday. A barrel of Brent was higher at USD71.33 on Monday, from USD70.38 at the time of the London equities close on Friday.
BP shares rose 3.4%, boosted by the stronger oil price.
Also supporting the FTSE 100 were miners, on the back of China data. Glencore rose 0.8%, while Rio Tinto added 0.2%.
ING analysts commented: "External demand continues to support Chinese economic growth, as the first-half trade surplus surged to a new high of USD586 billion amid resilient export growth and a year-on-year contraction of imports. While tariffs continue to drag on exports to the US, June data showed a smaller contraction after the tariff de-escalation in May."
A slew of corporate earnings across the globe will be in focus this week. In Europe, there are results from ASML and Novartis to come. Major banks headline events stateside.
"There is a torrent of earnings data this week from both sides of the Atlantic. In Europe, the focus will be on industrials and chemicals, companies with big global footprints, to see how tariffs have impacted their earnings," XTB analyst Kathleen Brooks commented.
"In the US, the key earnings to watch out for this week include JPMorgan, Wells Fargo, Citigroup, Goldman Sachs, Bank of America, Morgan Stanley and Netflix. So far 4% of companies on the S&P 500 have reported earnings, and 71% have reported earnings above expectations. However, this is below the 5-year average of 78%."
By Eric Cunha, Alliance News news editor
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