European Markets Navigate Earnings and Geopolitical Tensions

Deutsche Bank reported a higher-than-expected first-quarter profit in 2025, driven by a 10% jump in net revenues in its core investment banking division. The bank's net profit attributable to shareholders reached 1.775 billion euros, up 39% year-on-year. Despite upping credit provisions due to uncertainties in the geopolitical and macro-economic outlook, the bank remains confident in its 2025 targets.

European markets are expected to open mixed on Tuesday as investors analyze earnings reports and assess the impact of U.S. tariffs on the global economy. Key earnings highlights include HSBC, Deutsche Bank, Porsche, Lufthansa, and Novartis, with some companies beating expectations while others warn of potential losses due to trade tensions. The Stoxx 600 index has returned to a year-to-date gain despite selling in March and April. Traders are also watching U.S. jobs market data and Spanish economic growth figures.

The European Union is facing significant uncertainty and challenges due to the policies of US President Donald Trump during his first 100 days of his second term. The EU is dealing with trade tensions and the ongoing Russia-Ukraine war, with Trump's approach causing concern among European leaders. The EU foreign policy chief, Kaja Kallas, described the situation as 'unlike anything else we've seen before' and 'very intense.' European leaders are worried about the impact of Trump's policies on trade, economic growth, and inflation, as well as the US's commitment to supporting Ukraine. While some leaders, like Joerg Kukies, remain optimistic about resolving differences, others are more cautious, highlighting the uncertainty and unpredictability of the current situation.