European Markets Poised for Gains Amid U.S.-Japan Trade Deal Impact

European markets are set to open positively on July 23, 2025, buoyed by a recent trade agreement between the United States and Japan that has improved global market sentiment. According to preliminary futures data from IG, London's FTSE 100 index is expected to rise by 0.6%, France's CAC 40 by 1.2%, Germany's DAX by 1%, and Italy's FTSE MIB by 1.2% (CNBC, July 23, 2025).

The trade deal, announced by U.S. President Donald Trump, establishes a baseline tariff of 15% on Japanese exports to the United States and is seen as a significant development in easing trade tensions between the two nations (CNBC, July 23, 2025). Market analysts suggest that this agreement may bolster investor confidence in European markets, especially as concerns over impending U.S. tariffs scheduled to take effect on August 1 are alleviated.

Adding to the day’s economic activity, earnings reports from major corporations are rolling in. Notably, Spanish utility giant Iberdrola reported a 14% decline in its first-half net profit, amounting to €3.6 billion ($4.2 billion), alongside a €5 billion increase in share capital to support its investment strategy (CNBC, July 23, 2025). Similarly, Norwegian energy company Equinor announced a 13% drop in adjusted earnings for the second quarter, partially due to declining oil prices and a significant impairment on an offshore wind project in the U.S. (CNBC, July 23, 2025).

In contrast, Thales, a French defense contractor, reported stronger-than-expected profits and raised its full-year sales guidance, attributing the growth to robust demand in its aerospace and defense sectors. The company’s adjusted operating profit was €1.25 billion ($1.47 billion), reflecting a 13% increase from the previous year (CNBC, July 23, 2025).

Furthermore, UniCredit, Italy's second-largest bank, posted a 25% year-on-year increase in net profit for the second quarter, amounting to €3.3 billion ($3.87 billion). The bank's performance led to an upward revision of its full-year profit guidance, despite withdrawing its bid for Banco BPM due to regulatory challenges (CNBC, July 23, 2025).

As European markets brace for the day's trading, analysts will closely monitor consumer confidence figures, which will be released later today, alongside ongoing earnings reports from various sectors including retail, utilities, and finance. The anticipated positive opening of European indices is indicative of a broader recovery in market sentiment following the trade agreement and the latest corporate earnings announcements, suggesting a potentially robust trading session ahead.