European Midday Briefing: Stocks Rise as Investors Await Employment Data

MARKET WRAPS

European indexes were gaining, recovering ground after Wednesday's session ended mostly lower.

Health care and consumer stocks strengthened Thursday, helping to offset weakness weighing on the technology

sector.

Approaching midday, the FTSE 100, the CAC 40, the DAX and the pan-European Stoxx 600 index were in positive territory.

The moves come as investors have the chance to scrutinize employment data from both sides of the Atlantic today. Jobs reports for the European Union and the U.S. are expected.

Elsewhere, inflation in Switzerland eased in June . The annual rate was 0.5%, lower than the 0.6% of both April and May, marking the first decline since higher energy prices prompted prices to accelerate after the outbreak of the war in Iran.

Economic Insight

Barclays cautioned that the June employment report for the U.S. risks being distorted by the FIFA World Cup . It added investors were likely to place greater weight on the June CPI report on July 14, saying inflation data will offer a cleaner read on the economy.

"The data may also be distorted as hiring linked to the FIFA World Cup may have temporarily boosted employment in sectors such as leisure and hospitality during the survey period."

Market Insight

Several economists at the ECB symposium in Portugal sounded the alarm on artificial intelligence , warning about the potential global fallout if the AI boom turns to bust.

Saxo Markets contends some non-AI sectors, like healthcare,

could be a good hedge and offer better portfolio resilience as tech and semiconductor stocks become more volatile.

U.S. Markets:

U.S. indexes pointed to a mostly lower open as investors await to scrutinize June's nonfarm payrolls report. Thursday will be the last trading day of the week as markets close Friday in observance of the July 4 holiday.

Forex:

The dollar edged lower

against a basket of currencies ahead of the U.S. nonfarm payrolls report, as investors look for evidence on whether the Federal Reserve should raise interest rates.

The euro fell

to a one-year low against the pound, but ING said that sterling's gains could prove temporary as focus turns to who will be appointed the U.K.'s treasury chief.

"The U.K. fiscal straitjacket very much limits room for manoeuvre, and it is hard to see any major spending plans coming through without tax rises."

The euro

edged higher against the dollar but it could extend recent losses in coming weeks before recovering later in the year, ING said. The euro could attempt to break below $1.1300 in the near term if the market shifts towards pricing 50 basis points of U.S. rate rises this year.

"But based on a house view that the Federal Reserve does not hike, we are looking for the euro to trade back into the $1.16-$1.18 range into November/December."

Bitcoin recovered

after Fed Chair Kevin Warsh said inflationary risks have eased at the European Central Bank's forum in Portugal on Wednesday, prompting investors to price out the chance of an interest-rate rise in July, according to Deutsche Bank.

Bonds:

Eurozone government bond yields rose, tracking Treasury yields higher ahead of U.S. employment data.

There is more value in eurozone government bonds than in Treasurys , according to UniCredit's investment institute, which adds the reason is that the U.S. is more exposed to fiscal risks.

It envisages the 10-year Bund yield spreads to hover around 70 basis points and sees the scope for a substantial decline in yields as limited.

Government bond issuance in the eurozone will come from Spain and France for a combined volume of up to 20.75 billion euros. The supply should weigh on markets and investors may use it to scale

into 10-year Bunds, Commerzbank said.

Treasury yields rose across maturities

as economic data remained solid. Thursday's focus will be on the June employment data.

"An outcome around expectations--and note that the outcome has surprised on the upside over the past three months--means that the Federal Reserve can continue to set the inflation target ahead of the employment target, " SEB said.

The Treasury yield curve has flattened over recent weeks

despite an offsetting fall in inflation expectations, and could even invert, according to Capital Economics.

"We wouldn't be surprised if this curve inverted, but we don't think a U.S. recession is likely."

The outlook for government bonds

has improved amid easing geopolitical tensions and falling energy prices. The Investment Institute by UniCredit said, reckoning that the cautious stance of central banks is likely to prevent a significant decline in yields.

Energy:

Oil prices fell

1% on signs of progress in indirect U.S.-Iran negotiations.

"Oil prices are likely to remain under downward pressure as supply continues to normalize and geopolitical risk premiums unwind, although setbacks in negotiations or renewed security incidents could still trigger periods of volatility," MUFG said.

Natural Gas

European natural-gas prices

climbed on concerns over regional storage levels and lingering uncertainty over LNG supplies from the Persian Gulf.

Metals:

Gold prices ticked higher

after Fed Chair Warsh's less-hawkish-than-expected message.

"Gold could find near-term support if expectations for additional rate hikes continue to soften, although persistent inflation and a resilient U.S. economy are likely to limit upside potential," MUFG said.

Copper and base metals edged lower . Investor appetite was affected by a stronger dollar, and the market is waiting for the U.S. to review refined copper imports.

EMEA HEADLINES

Roche Lung-Cancer Drug Candidate Beats Existing Therapies in Late-Stage Trial

Roche Holding said a drug candidate showed better potential than existing therapies in a late-stage study with patients with a type of advanced lung cancer who had been previously treated.

The Swiss drugmaker said Thursday that its experimental drug, divarasib, met its primary and key secondary objectives in a head-to-head clinical trial that compared it against approved treatments Amgen's Lumakras and Mirati Therapeutics's Krazati.

European Tank Manufacturer KNDS Postpones IPO

European tank manufacturer KNDS has postponed its plans for an initial public offering citing current market volatility.

"KNDS and its shareholders will continue to monitor the capital markets conditions closely and stand ready to resume the IPO process as soon as market conditions allow," it said Wednesday.

Swiss Inflation Edges Lower After Energy Prices Cool

Swiss inflation edged lower in June, the first decline since higher energy prices prompted prices to accelerate after the outbreak of the war in Iran.

The annual rate of inflation was 0.5%, lower than the 0.6% of both April and May, Swiss data agency FSO said Thursday. Inflation in the prior two months had been at its highest level since 2024.

Shares in AOL Owner Jump 40% in Stock-Market Debut

Bending Spoons, an Italian technology company that bought up brands including AOL, Eventbrite and Vimeo, made its stock-market debut Wednesday at a valuation of more than $18 billion.

Its shares ended the day at $40.50, up roughly 40% from its $29 IPO price, giving the company a market value of $25.7 billion. The company founded by four friends raised $1.68 billion in its offering and listed on the Nasdaq under the ticker " BSP. "

Massive Russian Strikes Pound Ukraine's Capital

Russian missiles and drones pounded Kyiv and other Ukrainian cities overnight and early Thursday morning, killing at least 13 people and wounding more than 80, according to Ukrainian officials.

Kyiv bore the brunt, with ballistic and cruise missiles as well as waves of drones hitting the capital over several hours. The strikes caused fires at a hotel and several residential buildings, including one nine-story building where six stories were destroyed. City officials said people were trapped inside.

GLOBAL NEWS

Bank Stocks Rally, Chips Pull Back in Mixed Day of Trading

Strong manufacturing data and commentary from new Federal Reserve Chairman Kevin Warsh boosted economically sensitive stocks Wednesday.At a conference in Portugal, Warsh dodged questions about whether an interest-rate hike is in the cards this month but said that inflationary risks have eased since the central bank's last meeting. That, combined with a fresh survey showing that factory activity continued to expand in the U.S. in June, appeared to leave investors feeling better about the state of the economy.

Financial, real estate, and consumer discretionary stocks, all of which do better when the economy is strong, outperformed on Wednesday. So did Facebook parent Meta Platforms, which jumped 8.8% on a news report that said it plans to build a cloud business to sell excess artificial-intelligence capacity.

Warsh Says Inflation Outlook Has Improved but Won't Say if Fed Should Hike Rates

Federal Reserve Chairman Kevin Warsh declined to say Wednesday whether the central bank needed to consider a rate increase later this month but said his first weeks in the job have seen risks of higher inflation recede. That was evidence, he said, that markets have already grasped his hard line on prices.

"Expectations of future inflation [over the last four weeks] have come down. Inflation risks have come down," Warsh said at a conference in Portugal alongside foreign counterparts. Anyone expecting the Fed would tolerate inflation running above its 2% goal "would be disappointed," he added.

Is the U.S. jobs market getting better? June employment report to give us a heat check.

Is it getting easier to find a job? Are businesses really hiring more workers? That's what the official data statistics tell us, but Americans aren't so sure.

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July 02, 2026 05:12 ET (09:12 GMT)