European Trading Session Report | July 23, 2026 | Analysis during European hours (8:00 AM – 5:00 PM CET)

**European Markets Slide as Risk Sentiment Wanes Amid Policy Uncertainty** European equities are under pressure in early trading, with the Euro Stoxx 50 down 0.81% and the CAC 40 leading losses at -1.01%, while the FTSE 100 shows relative resilience with a modest 0.19% decline. Investor sentiment remains cautious following mixed signals from the European Central Bank, where policymakers continue debating the timing of further rate cuts despite softening inflation. The euro is edging higher, with EUR/USD up 0.13%, supported by a weaker dollar as markets reassess Fed rate expectations after yesterday’s softer US retail sales data. The GBP/USD pair is flat, hovering near 1.2700, as traders await UK inflation figures later this week for clearer guidance on Bank of England policy. EUR/GBP is firm at 0.8450, reflecting mild euro strength amid political uncertainty in France. The Swiss franc is steady, with USD/CHF up 0.04%, as safe-haven demand remains subdued despite the risk-off tone in equities. Overnight, Asian markets traded mixed, with Japan’s Nikkei slipping on yen strength while Chinese equities rebounded on stimulus hopes. Sector-wise, European banks and tech stocks are lagging, weighed down by rising bond yields and fading risk appetite. Energy shares are also underperforming as Brent crude holds near $85 amid demand concerns. US markets closed lower on Tuesday, with the Nasdaq 100 down 0.54% as tech stocks retreated, while the Dow Jones narrowly avoided losses. Looking ahead, focus shifts to Eurozone industrial production data and remarks from ECB officials, which could reinforce expectations of a September rate cut. The broader market mood remains fragile, with traders balancing growth concerns against central bank policy divergence. Volatility is likely to persist as investors await fresh catalysts.

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