European Trading Session Report | July 29, 2026 | Analysis during European hours (8:00 AM – 5:00 PM CET)

**European Markets Edge Higher Amid Mixed Sentiment** European equities are trading with cautious optimism this session, with the FTSE 100 leading gains (+1.40%) as energy and financial stocks rebound, while the Euro Stoxx 50 lags slightly (-0.05%) amid lingering concerns over ECB policy. The DAX (+0.61%) and CAC 40 (+0.87%) are benefiting from a weaker euro and stronger industrial sector performance, though trading volumes remain subdued ahead of key Eurozone inflation data later this week. In FX markets, the euro is firming modestly against the dollar (+0.11%) as markets reassess the likelihood of further ECB rate cuts following recent hawkish commentary from policymakers. Sterling is outperforming (+0.14% vs. USD), supported by expectations of a more gradual Bank of England easing cycle, while the Swiss franc is gaining ground (-0.10% vs. USD) as safe-haven demand creeps in. The yen is strengthening (-0.10% USD/JPY) after Japanese officials reiterated warnings against excessive currency weakness. Overnight, Asian markets closed mixed as Chinese equities struggled amid weak industrial profits, while US indices were flat in the previous session as investors awaited fresh catalysts. Commodities are under pressure, with oil retreating on demand concerns and gold dipping as Treasury yields stabilize. Sector-wise, European autos and banks are advancing, whereas tech shares are subdued following Nasdaq 100 underperformance. Investor sentiment remains fragile, with focus shifting to tomorrow’s German CPI and US PCE inflation prints for clearer directional cues. The ECB’s Schnabel is scheduled to speak later today, potentially adding volatility to euro crosses.

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