European stocks rise on trade optimism; U.S. payrolls loom large
- July 3, 2025
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Investing.com - European stocks rose Thursday on continued trade optimism, although gains have been tempered by caution ahead of the release of the widely-watched monthly U.S. jobs report.
At 03:05 ET (07:05 GMT), the DAX index in Germany gained 0.4%, the CAC 40 in France climbed 0.3% and the FTSE 100 in the U.K. rose 0.5%.
Trade optimism after Wall Street highs
European equities have benefited from the positive tone seen on Wall Street overnight – with the S&P 500 and NASDAQ Composite indices posting respective record highs – after President Donald Trump said the U.S. had reached a trade agreement with Vietnam.
Although details remain unclear, this announcement has raised hopes that more deals will be announced before the July 9 deadline, in line with the previously announced trade deal with China, which resulted in the Trump administration overnight lifting restrictions on chip design software sales in China.
The European Commission, which is negotiating on behalf of the EU, is set to hold meetings with the Trump administration this week.
U.S. payrolls loom large
The European data slate includes services activity data for the eurozone as a whole later in the session, but the day’s main risk event will be the U.S. payrolls report.
Analysts are forecasting a rise of 110,000 in June, a drop from May’s 139,000, with the jobless rate ticking up to 4.3%, but the possibility of a weaker number exists given Wednesday’s private sector payrolls report recorded the first fall in over two years.
The resilience of the U.S. labor market has helped reassure the majority of Federal Reserve members that they can afford to hold off on cutting rates until they can gauge the real impact of tariffs on inflation.
The market currently sees around a 25% probability for a July Fed rate cut, but a weak report could see these odds increase substantially.
U.K. political turmoil
Investors will also be keeping a close eye on events in the U.K. after gilt yields jumped sharply on Wednesday on investor anxiety over Britain’s finances after the government’s reversal on welfare reforms, with U.K. Chancellor Rachel Reeves appearing visibly upset in Parliament.
The government said Reeves was dealing with a “personal matter” and Prime Minister Keir Starmer later said she has his full support.
Currys boosted by solid sales growth
In the corporate sector, Currys (LON: CURY ) posted stronger-than-expected annual results, as solid sales growth and tight cost control helped the British electronics retailer offset inflationary pressures and higher wage costs.
Watches Of Switzerland (LON: WOSG ) projected full-year revenue growth of 6% to 10%, after the British luxury retailer’s U.S. business revenue surpassed the $1 billion mark for the first time, driven by strong consumer demand.
Oil prices retreat
Crude prices fell Thursday, handing back some of the previous session’s gains after an unexpected build in U.S. inventories and ahead of an upcoming OPEC+ meeting, which is expected to result in an output hike.
At 03:05 ET, Brent futures dropped 0.8% to $68.58 a barrel and U.S. West Texas Intermediate crude futures fell 0.8% to $66.90 a barrel.
Both contracts gained around 3% on Wednesday, rising to their highest in one week as Iran suspended cooperation with the U.N. nuclear watchdog, raising concerns the lingering dispute over the Middle East producer’s nuclear program may result in a disruption to supply from this region.
U.S. oil inventories grew by 3.85 million barrels last week, government data showed on Wednesday, raising questions about just how strong fuel demand will be this summer season.
OPEC+, a group of top producers, will meet over the weekend, and is expected to boost production by 411,000 barrels per day in August.