Europe Stocks, Euro Rise on Earnings Expectations & Declining Geopolitical tension

Leading Eurozone stocks surge higher on today’s open as the market gears up for a busy week for earnings and economic data.

The DAX is up 0.7% and the CAC is up 1.3% as investors look to this week’s earnings reports from major mega-caps. Kicking of the series of reports tomorrow is Alphabet, the company is facing a DoJ court filing that may hinder its dominant position.

Other earnings reports will come from Meta and Microsoft on Wednesday, plus Amazon and Apple on Thursday. The market’s perception is also changing regarding a more dovish stance from the ECB.

This week’s data may back up the possibility of a third back-to back rate cut. On Wednesday, we get the preliminary flash GDP, Consumer Confidence, and Economic Sentiment for the Eurozone.

And on Thursday, the EU will release CPI data for the Eurozone along with CPI for France and Italy. The [[EURUSD]] halted its 4-session decline today hovering at 1.0810, after losing 3.3% last week.

The common currency may have some relief today as there is no economic data and the market consolidates last week’s decline.

Going forward, I expect the euro to continue to suffer as economic data from the US is stronger and the ECB may be forced to implement faster cuts than the Fed.

Geopolitical Tensions Ease

The markets are taking some reprieve after Israels attacks on Iran left critical infrastructure untouched. Investor concerns were mitigated when Iran reported that nuclear and oil facilities were not impacted.

Supply disruption could have played a major role in sending energy prices higher, at the same time fear of escalation would have hurt stock prices. Instead, the fact that the strikes were limited in some way gives hope for de-escalation.

USOIL is down 5.4% on the day, and Natural Gas is down 0.65%. WTI oil closed last week at $71.62 and opened this week with a gap to the downside, trading at $67.42.