Vodafone in Focus as European Markets Eye Trade Talks

Vodafone is set to report earnings today as European markets open stronger, with investors watching closely for progress on global trade negotiations. US. stocks were flat on Monday following Moody’s downgrade of the US. sovereign credit rating, while Treasury yields remained elevated and the dollar hovered near recent lows. China cut key lending and deposit rates for the first time since October in a bid to support its economy, and Trump confirmed Russia-Ukraine ceasefire talks are set to begin.

Equities

The FTSE 100 rose 0.2% on Monday, closing at a seven-week high after the UK signed a wide-ranging deal with the European Union. The agreement marked the most substantial reset of ties since Brexit, covering trade, defence, and fishing access. Earlier in the day, the index had fallen by as much as 0.8%. In contrast, the FTSE 250 slipped 0.1%, ending a seven-session winning streak.

Among UK-listed companies, Diageo fell 1%. The spirits group announced plans to cut $500 million in costs and dispose of assets by 2028 in an effort to improve performance and reduce debt. Management has faced pressure following weaker earnings and falling volumes in key markets. No price-sensitive updates were reported from large energy or pharmaceutical names such as BP or AstraZeneca.

In the US, equity indices finished near flat after Moody’s downgraded the federal government’s credit rating from Aaa to Aa1 on Friday, citing concerns about the $36 trillion national debt. The Dow Jones rose 0.32% to 42,792.07, the S&P 500 edged up 0.09% to 5,963.60, and the Nasdaq gained 0.02% to close at 19,215.46. Despite the muted session, the S&P 500 extended its run of daily gains to six.

TXNM Energy climbed 7% after it agreed to be acquired by Blackstone Infrastructure in a deal worth $11.5 billion. The move adds to a recent trend of private capital targeting utility assets. Shares in Novavax jumped 15% after the company secured long-awaited approval from US regulators for its COVID-19 vaccine, reviving investor interest in the biotech firm after a long period of uncertainty.

Regeneron Pharmaceuticals rose 0.4% following confirmation it will acquire 23andMe through a bankruptcy auction for $256 million, aiming to deepen its genetics research capabilities. Trading volumes were heavier than average, with 19.41 billion shares changing hands across US exchanges compared with a 20-day average of 17.34 billion. Bond markets were also in focus, as 10-year Treasury yields moved up to 4.449% amid concerns that new tax legislation could further raise federal borrowing levels.

Forex & Commodities

The US dollar weakened on Monday, falling to its lowest level since 8 May against the yen, Swiss franc and euro following Moody’s downgrade of the US government’s credit rating from Aaa to Aa1. The greenback declined 0.5% to ¥144.98 and touched 0.8317 against the Swiss franc. The euro gained 0.6% to $1.1232, its highest since 9 May. Sterling also rose 0.6% to $1.3355 after the UK signed a new trade and defence agreement with the EU, the most wide-reaching since Brexit.

Despite the dollar’s weakness, New York Federal Reserve President John Williams said he had not seen significant outflows from US assets, noting that the dollar remained the global reserve currency. Treasury Secretary Scott Bessent reaffirmed the Trump administration's intention to impose tariffs on countries not negotiating trade deals “in good faith.” Trade talks between the US and the EU resumed, offering a potential break in recent deadlock. Meanwhile, a key US congressional committee approved Trump’s proposed tax cut bill, which could add up to $5 trillion to US debt over the next decade.

Gold rose as investors looked for safer assets. Spot prices increased 0.9% to $3,229.51 an ounce, while US gold futures settled 1.5% higher at $3,233.50. Goldman Sachs maintained its gold price forecast of $3,700 by year-end, with a mid-2026 target of $4,000, citing moderate private-sector buying.

Oil prices were little changed. Brent slipped 6 cents to $65.48 per barrel, while West Texas Intermediate edged up 1 cent to $62.70. Traders assessed the impact of stalled US-Iran nuclear talks and strong refining margins in Asia. Chinese demand expectations weighed on sentiment after data showed slowing industrial output and retail sales.