US-EU trade deal hopes, Stoxx 600, DAX

The Stoxx 600 index provisionally closed 0.24% higher on Thursday, marking a second day of gains as investors remain cautiously optimistic that the European Union will strike a trade agreement with the U.S. before an Aug. 1 deadline.

However, enthusiasm cooled slightly from Wednesday, with the tariff-sensitive autos sector up just 0.13%. EU officials told CNBC that a deal is still not guaranteed, even as expectations mount for the U.S. to impose a 15% baseline tariff rate on imports from the bloc, with some sector exemptions.

The European Central Bank held interest rates on Thursday after a run of cuts took its key deposit facility to 2% from 4%. ECB President Christine Lagarde described policymakers as being in “wait and watch” mode while the economic backdrop remains highly uncertain.

Financial markets are still reacting to the European Central Bank holding interest rates steady, a move that was widely anticipated.

The pan-European Stoxx 600 was last seen trading up 0.2%, paring gains seen earlier in Thursday’s session.

Yields on regional government bonds edged higher after the European Central Bank’s interest rate hold, with the yield on the German 10-year bund — seen as a benchmark for the euro zone — up by almost 9 basis points at 1:43 p.m. in London (8:43 a.m. ET).

Bond yields and prices move in opposite directions.

French, Italian and Spanish 10-year government bonds also saw their yields rise by 8 basis points.

— Chloe Taylor

The euro was down 0.2% against the U.S. dollar after the European Central Bank held interest rates steady on Thursday.

The European currency continued to move lower following the widely anticipated decision from policymakers.  

— Chloe Taylor

The European Central Bank on Thursday kept interest rates steady amid major economic uncertainty, as the European Union scrambles to negotiate a trade agreement with the U.S. before the end of the month.

The ECB has cut interest rates at each of its four meetings so far this year, taking its key deposit facility from 3% in January to 2% in June. Last year it reduced rates from a record high of 4%.

“The environment remains exceptionally uncertain, especially because of trade disputes,” the ECB said in a statement.

Read more here.

— Jenni Reid

Shares of French software giant Dassault Systemes fell 9.4% by 12:05 p.m. in London (7:05 a.m. ET), following the publication of the company’s second quarter earnings.

In the three months to June, constant currency revenue rose 5% year-on-year to reach 1.52 billion euros ($1.8 billion) — but analysts had been expecting quarterly revenue to hit 1.55 billion euros in the reporting period, according to LSEG data.

Dassault confirmed its full-year guidance of revenue growth within the range of 6% and 8%.

— Chloe Taylor

Shares of Finland’s Neste gained 13.7% to top the Stoxx 600 index by 11:34 a.m. in London (6:34 a.m. ET).

That came after the company reported comparable earnings before interest, taxes, depreciation, and amortization (EBITDA) of 341 million euros ($401 million) for the second quarter.

Analysts had been expecting the oil refiner to report quarterly EBITDA of 298 million euros.

— Chloe Taylor

Finnish telecoms giant Nokia’s second-quarter profit came in below expectations, a day after the company warned it would take a hit of up to $364 million this year from tariffs and a weak U.S. dollar.

The firm’s second-quarter earnings report, published Thursday, showed a 29% year-on-year drop in comparable operating profit, which came in at 301 million euros.

Analysts had been expecting the figure to hit 360 million euros, according to LSEG data.

“We did have operating headwinds from currency, well of course we hedge … [but] the significance of the currency swing in the quarter was something we felt like we could not recover,” Nokia CEO Justin Hotard told CNBC’s “Squawk Box Europe” on Thursday.

Finland-listed shares of Nokia were 0.5% lower by 9:06 a.m. in London (4:06 a.m. ET), extending the 7.6% loss they notched on Wednesday.

— Chloe Taylor

Deutsche Bank on Thursday beat expectations on the bottom line and said it was on track to meet full-year targets, despite mixed results within its key investment banking unit and euro gains against the U.S. dollar.

Net profit attributable to shareholders reached 1.485 billion euros ($1.748 billion) in the second quarter, versus a 1.2 billion forecast from Reuters. It compares with a loss of 143 million euros in the June quarter of 2024, when earnings were hit by legal provisions linked to Deutsche Bank’s takeover of Postbank.

Across the board, the bank noted an impact from the relative strength of the euro against the U.S. dollar, with Chief Financial Officer James von Moltke describing it to CNBC’s Annette Weisbach as the “big thing that’s kind of flowing through our numbers.”

Read the full story.

— Ruxandra Iordache

Italian luxury house Moncler posted a dip in second-quarter sales as weak tourist flows weighed on otherwise robust domestic demand in the key U.S. and China markets.

Group revenues fell 1% year-on-year at constant exchange rates to 396.6 million euros ($538.3 million) in the three months to June 30, below the 427.2 million forecast by analysts in an LSEG poll.

The company, known for its ready-to-wear outwear, also flagged an ongoing “difficult global macroeconomic environment” and said that it had moved to slightly raise prices to offset additional tariff costs.

— Karen Gilchrist

French oil giant TotalEnergies on Thursday reported a significant fall in second-quarter earnings, against a backdrop of lower prices for oil and liquified natural gas.

The energy major posted second-quarter adjusted net income of $3.6 billion, reflecting a 23% drop from the same period a year earlier.

Analysts had expected TotalEnergies’ second-quarter adjusted net income to come in at $3.62 billion, according to an LSEG-compiled consensus.

TotalEnergies also confirmed it would continue to offer share buybacks of up to $2 billion in the third quarter.

— Sam Meredith

BNP Paribas has confirmed its outlook after booking a rise in second-quarter group revenue to 12.6 billion euros.

The French lender says it expects revenue to accelerate in the second half of the year, driven by its Commercial and Personal Banking business.

— Brittany Dawe

The U.K. is set to sign its trade agreement with India today, as Indian Prime Minister Narendra Modi visits the country.

U.K. officials say the deal will add almost £5 billion ($6.8 billion) to the British economy.

Under the agreement, India’s average charge on U.K. goods will fall from 15% to 3%, while Indian manufacturers will get greater access to the U.K. market.

— Jordan Butt

Nestle on Thursday posted better-than-expected first-half organic sales growth as it leaned on price hikes to offset higher input costs for its coffee and cocoa-related products.

Sales growth at the Nescafe and KitKat maker was up 2.9% over the six-month period, led by price rises of 2.7%, slightly ahead of the 2.5% forecast by analysts in a company compiled consensus.

The world’s largest packaged food company said real internal growth of 0.2% reflected “lower consumer demand and the short-term impact of consumers and customers adjusting to price increases.”

The Swiss company continued to flag “increased macroeconomic risks and uncertainties” ahead, but nevertheless maintained its 2025 guidance for organic sales growth to improve versus 2024 and for an underlying trading operating profit margin of 16% or above.

— Karen Gilchrist

Good morning from London, and welcome to CNBC’s live blog covering all the action and business news in European financial markets on Thursday.

Futures data from IG suggest a positive open for European indexes as hopes of a U.S.-EU trade deal rise, with London’s FTSE 100 seen opening 0.4% higher, France’s CAC 40 up 1.3%, Germany’s DAX up 1.1%, and Italy’s FTSE MIB 1.24% higher.

European markets rose Wednesday amid hopes that the U.S. and European Union could be closing in on a trade deal. Regional stocks jumped yesterday after the Financial Times reported that the two large trading partners were closing in on a 15% tariff deal.

Optimism that a deal was close rose after President Donald Trump announced that he had completed a “massive Deal” with Japan, and hinted that Europe could be next.

“We have Europe coming in tomorrow, and the next day, we have some other ones coming in,” Trump said late on Tuesday, without specifying details.

— Holly Ellyatt

It’s a busy day for central banks and corporates on Thursday.

The European Central Bank is widely expected to keep interest rates unchanged as it gauges the trade tariff landscape.

On the earnings front, reports are set to come from BNP, Roche, Nokia, Nestle, Lloyds Banking Group, BT Group, Reckitt Benckiser Group, ITV, Wizz Air, TotalEnergies, Vodafone, Centrica, Michelin, Dassault Systemes, ST Micro, Carrefour, Deutsche Bank, Deutsche Boerse, LVMH and more.

On the data front, flash European purchasing managers’ index data and Germany’s GfK consumer confidence figures are due.

— Holly Ellyatt