European stock markets are set for a mixed and cautious start on Tuesday, with futures pointing to divergent openings across the continent.
Investors continue to grapple with the looming threat of significant US tariffs on the European Union, while a major UK fintech firm, Starling Bank, is reportedly considering a US listing, dealing another blow to the London Stock Exchange.
Futures data from IG suggests a fragmented picture for European markets at the open: London’s FTSE 100 and Germany’s DAX are both expected to open 0.2% higher, while France’s CAC 40 is projected to fall by 0.5%.
Italy’s FTSE MIB is also seen opening 0.2% higher.
This somewhat more upbeat mood follows a difficult start to the week. The pan-European Stoxx 600 index closed 0.06% lower on Monday, though it did manage to pare some of its earlier losses to finish at a session high.
The underlying caution in the market stems from US President Donald Trump’s announcement over the weekend that he would impose a 30% tariff on goods imported from the EU.
This new duty is scheduled to take effect on August 1, leaving the EU scrambling to negotiate a trade deal with the US before the deadline.
Starling Bank mulls US listing, a fresh setback for London
In a significant corporate development, UK challenger bank Starling is reportedly considering a US listing as it looks to expand into the country.
The news, which came from an interview with the company’s CFO published in the Financial Times this morning, deals yet another blow to the London Stock Exchange (LSE).
The LSE has been struggling to attract new listings, having experienced its worst first half for IPO fundraising in decades this year, according to data from Dealogic.
This potential move represents a notable shift in strategy for the fintech firm. Just last year, Starling Bank’s then-interim CEO had stated that the company was “very committed” to listing in London.
Starling was valued at £2.5 billion ($3.4 billion) in its most recent fundraising round three years ago. Its potential departure would be seen as a significant loss for London’s ambition to be a global hub for fintech listings.
UK’s economic challenges: spotlight on the chancellor
This news comes at a challenging time for the UK economy. Almost a year ago, UK Finance Minister Rachel Reeves, in her first Mansion House speech, declared, “I said on day one that economic growth was now our national mission.”
Fast forward to today, and investors remain largely unconvinced. They are rattled by a slowing economy, muted investment, and a UK government debt that is approaching 100% of its gross domestic product (GDP), according to the Office for Budget Responsibility, the government’s fiscal watchdog.
Chancellor of the Exchequer Reeves’s upcoming Mansion House address on Tuesday evening will be a crucial moment.
It will be a key opportunity for her to demonstrate any progress made and to signal the next steps she plans to take to inject much-needed growth back into the UK economy.
Data and earnings on the horizon
Beyond the political and corporate drama, investors will be monitoring several key events today.
On the earnings front, reports are due from Experian, Ericsson, and Barratt Redrow, which could influence sentiment in their respective sectors.
Data releases will include the latest monthly UK retail sales figures, which will provide a fresh snapshot of consumer health in the country.
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