European Trading Session Report | December 29, 2025 | Markets analysis during European hours (8:00 AM – 5:00 PM UTC)

### European Market Commentary: Cautious Start Amid Geopolitical Tensions

As the European trading session gets underway, major indices are edging lower in early trade, reflecting a mix of subdued sentiment from overnight US and Asian sessions and lingering uncertainties over geopolitical developments. The Euro Stoxx 50 is dipping 0.11%, with the DAX slipping 0.18% amid broader risk aversion. The CAC 40 is off by a modest 0.04%, while the FTSE 100 is declining 0.06%. Sector-wise, European defense stocks are under pressure, with names like Leonardo and Rheinmetall sliding around 2-4% as stalled Ukraine peace talks between US and Ukrainian leaders dampen expectations for prolonged regional tensions that had buoyed the sector.

Overnight, US markets closed marginally lower, with the S&P 500 down 0.03%, the Dow Jones off 0.04%, and the Nasdaq 100 retreating 0.05%, weighed by profit-taking in tech amid debates on the sustainability of the AI boom. Asian equities followed suit, hovering near records but turning volatile in commodities like silver, which is fluctuating sharply on supply concerns. This tepid handover is contributing to a cautious European open, where investors are repositioning away from cyclical sectors toward defensives.

In foreign exchange, the euro is strengthening against the dollar, with EUR/USD advancing 0.08% as traders price in potential ECB hawkishness ahead of upcoming policy signals. The pound is weakening, GBP/USD falling 0.10% on sticky UK inflation data and questions over bank lending dynamics, which highlight customer-driven caution in credit extension. Meanwhile, the Swiss franc is gaining ground, USD/CHF down 0.06%, underscoring its safe-haven appeal amid Middle East flare-ups, including violent Syrian protests. Broader dynamics show the dollar softening overall, with USD/JPY declining 0.16% and AUD/USD slipping 0.18%, signaling a pullback from recent USD strength.

European markets are driven by a confluence of factors: political risks from Ukraine and Syria are tempering optimism, while Eurozone data underscores resilient growth without over-reliance on rate cuts, per regional central bank views. ECB policy remains in focus, with officials likely to emphasize data-dependent easing amid cooling inflation. Market sentiment is neutral to cautious, with positioning skewed toward bonds as equity valuations stretch near records.

Index	Price	Daily (%)
Euro Stoxx 50	5742.67	-0.11
DAX	24295.76	-0.18
CAC 40	8099.94	-0.04
FTSE 100	9865.04	-0.06

Index	Price	Daily (%)
S&P 500	6929.94	-0.03
Dow Jones	48710.97	-0.04
Nasdaq 100	25644.39	-0.05

Pair	Price	Daily (%)
EUR/USD	1.18	+0.08
GBP/USD	1.35	-0.10
USD/JPY	156.23	-0.16
EUR/GBP	0.87	+0.17
USD/CHF	0.79	-0.06
AUD/USD	0.67	-0.18
USD/CAD	1.37	+0.11

Crypto	Price	Daily (%)
Bitcoin	89438.58	+1.82
Ethereum	3011.49	+2.13

Date	Time	Cur	Imp	Event	Actual	Forecast
2025-12-29	06:00		Medium	France Jobseekers Total (Nov)
2025-12-29	10:00		Medium	Pending Home Sales (MoM) (Nov)		1.0%
2025-12-29	10:30		High	Crude Oil Inventories		-2.000M
2025-12-29	10:30		Medium	Cushing Crude Oil Inventories
2025-12-29	11:00		Medium	CPI (MoM) (Dec)
2025-12-29	11:00		Medium	CPI (YoY) (Dec)

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