This is CNBC’s live blog covering European markets.
Risky assets remain vulnerable to a ‘sharp correction’: Bank of England
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Geopolitical tensions and macroeconomic uncertainty continue to pose a risk to the U.K.’s financial stability, the Bank of England said Wednesday.
In its
Financial Stability Report
, the central bank’s Financial Policy Committee (FPC) outlined the U.K.’s resistance to ongoing risks. These include the conflict between Israel and Iran, Russia’s war with Ukraine, U.S.-China relations and President Donald Trump’s trade policy, outlined in April, which sent global markets reeling.
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The BoE noted that a tariffs pause by Trump reassured investors and some risk sentiment recovered — but warned of the possibility of a “sharp correction.”
“Risks to the global outlook remain high … Despite this, risky asset prices have rebounded to historically stretched levels across several asset classes since early April,” the central bank wrote.
“The FPC therefore continues to judge that risky asset values are vulnerable to a sharp correction, and that this could interact with vulnerabilities in the system of market-based finance, adversely affecting the cost and availability of finance for households and businesses.”
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It added, however, that U.K. households and businesses remain broadly resilient, and the country’s banking looks strong and able to support people, “even if economic, financial and business conditions became substantially worse than expected.”
— Katrina Bishop
London IPO fundraising fell 64% in the first half of the year, EY says
There were nine new listings on the London Stock Exchange in the first half of the year, according to professional services firm EY.
In a new report released this morning, EY said those listings raised £182.8 million ($248.5 million), marking a 64% year-on-year decline in deal value.
The U.K. downturn was part of a wider trend seen across Europe, where IPO proceeds fell 60% year-on-year to $5.9 billion.
However, Europe was an outlier – the global IPO market raised $62 billion from an estimated 540 deals in the first half, according to EY, which reflected a 17% jump in total proceeds from the same period a year earlier.
—
Chloe Taylor
Defense stocks touch record high
The European Stoxx Aerospace and Defense index rose to a new record high this morning, following a gain of around 1.1%.
So far this year, the index has surged more than 53%.
Top performers in the sector on Wednesday include Germany’s
Renk
, which jumped 5.3% after Bloomberg
reported
the military vehicle parts maker was considering expanding to offer a civilian business. Poland’s
Lubawa
was last seen trading 3% higher, while
Airbus
was up by 1.2%.
—
Chloe Taylor
Banking stocks hit 17-year high
The Stoxx Europe 600 Banks index has risen to its highest level since 2008 this morning, after a gain of 1.4% so far today.
Top gainers in the banking sector include
Societe Generale
, last seen 3.7% higher,
Banco Sabadell
, up 2.8%, and
Deutsche Bank
, which has gained 2.3%.
Read more on European banking stocks’ outperformance this year.
—
Chloe Taylor
European shares open higher
It’s around 30 minutes since European markets opened, and regional stocks are edging higher.
The pan-European
Stoxx 600
was last seen trading up by 0.1%, with all major bourses in positive territory.
The French
CAC 40
and Germany’s
DAX
have both gained 0.4%, while London’s FTSE 100 is 0.1% higher.
—
Chloe Taylor
What’s the latest on tariffs?
Here’s a roundup of the trade policy updates that have come from the White House so far this week.
New duties on 14 countries:
On Monday, U.S. President Donald Trump extended his “reciprocal tariffs” deadline to Aug. 1, but announced new tariff rates of 25% to 40% on 14 trading partners. The affected countries are
Japan
,
South Korea
,
Malaysia
,
Kazakhstan
,
South Africa
,
Laos
,
Myanmar
,
Bosnia and Herzegovina
,
Tunisia
,
Indonesia
,
Bangladesh
,
Serbia
,
Cambodia
and
Thailand
.
Tariffs on copper:
“Today, we’re doing copper,” Trump
said
during a Tuesday Cabinet meeting at the White House. Without giving details on when the duties on the metal would take effect, Trump said the new tariff on copper would be 50%.
Threatened tariffs on pharmaceuticals:
At the same Cabinet meeting, Trump also reiterated his previous threat to impose sector-specific tariffs on pharmaceutical goods. The sector would face “a very, very high rate, like 200%,”
the president said
.
No news on the EU:
No new tariffs targeting the European Union have been announced, with many seeing the lack of a letter from the Trump administration to the bloc as a sign that a trade agreement will be struck before the looming deadline. An EU diplomat
told CNBC on Monday
that any framework deal is likely to include a 10% baseline tariff and may see certain goods — such as aircraft and spirits — given exceptions. It was also
widely reported
earlier this week that European Commission President Ursula von der Leyen had a “good exchange” with Trump over the weekend.
—
Chloe Taylor
Here are the opening calls
Good morning from London and welcome to CNBC’s live blog covering all the action and business news in European financial markets on Wednesday.
Futures data from IG suggests regional markets will open in mixed territory, with London’s
FTSE 100
expected to open 0.2% higher, Germany’s
DAX
0.1% higher and France’s CAC 40 up 0.5%higher. Futures tied to Italy’s
FTSE MIB
were flat this morning.
Global markets have been seesawing this week, as traders digest the latest trade tariff news. Overnight, Asia-Pacific markets were mixed, while U.S. futures were little changed, after U.S. President Donald Trump ruled out a deadline extension on
steep tariffs on 14 countries
that are due take effect on Aug. 1.
Trump on Tuesday also
announced a 50% levy on copper imports
and signaled that more sector-specific tariffs will come soon. He also threatened to impose tariffs of up to 200% on pharmaceutical exports into the U.S., but said that he will “give people about a year, year and a half” until the
duties go into effect
.
— Holly Ellyatt
What to look out for on Wednesday
Markets will be keeping an eye on comments from the OPEC seminar in Vienna on Wednesday, as well as all the latest tech news from the RAISE Summit in Paris, where the outlook for artificial intelligence is a key focus.
Traders are also assessing the likelihood of more trade deals between the U.S. and partners as the initial deadline for reduced tariffs, Wednesday, is reached. The U.S. has already sent 14 countries “letters” telling them what trade duties they will be hit with on a later date, Aug. 1.
Investors in Europe are awaiting a U.S.-EU trade deal, with speculation that an agreement could be imminent.
There are no major earnings or data releases Wednesday.
— Holly Ellyatt
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