European stocks rose on Monday, continuing last week’s gains, driven by optimism over a possible Ukraine peace deal. Investors are now focusing on U.S. inflation data and tariff talks later this week.
The STOXX 600 index climbed 0.3%, nearing its highest level since July 31. However, hopes for peace hurt German defense stocks, with Rheinmetall falling 3.7%, Renk down 3%, and Hensoldt dropping 2.1%.
Danish wind farm developer Orsted plunged 22% after announcing a $9.4 billion rights issue due to challenges in the US offshore wind market.
Northern Data fell nearly 3% after US company Rumble revealed plans for a $1.17 billion offer for the German AI cloud firm.
However, the mood for European shares has since soured slightly as market participants are preparing for trade and geopolitical risks as the China-US trade truce ends tomorrow, with uncertainty about whether it will be extended or tensions will rise again.
On the FX front, The dollar index dropped 0.2% to 98.073 after falling 0.4% last week. It weakened 0.2% against the yen, trading at 147.46, with Japanese markets closed for a holiday.
The offshore yuan traded at 7.184 to the dollar, swinging between gains and losses after data showed China’s producer prices fell more than expected in July, while consumer prices stayed flat.
The Australian dollar held steady at 0.6526 ahead of a central bank meeting on Tuesday, where a 0.25% rate cut to 3.60% is expected due to weak inflation and rising unemployment.
The New Zealand dollar stayed near 0.59545, while the British pound rose 0.1% to 1.3465.
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