European stocks opened cautiously due to mixed performance among major indices amid uncertain trade talks.

    by VT Markets
    /
    Jun 9, 2025
    European stocks started the day with caution due to slow-moving US-China trade talks in London. The major indices showed mixed results: Eurostoxx was down 0.2%, Germany’s DAX fell by 0.3%, and France’s CAC 40 dropped by 0.1%. The UK’s FTSE remained stable, while Spain’s IBEX increased slightly by 0.1%. Italy’s FTSE MIB decreased by 0.2%. Traders are feeling cautious because there haven’t been many updates on the US-China negotiations. This uncertainty led to a mild decline in S&P 500 futures by 0.1%. Meanwhile, the dollar weakened across many currencies. The Australian dollar gained strength, with AUD/USD nearing the 0.6500 mark. In summary, European stocks are trading carefully today. Investors are not jumping in quickly, mainly due to the ongoing, slow trade talks between the US and China in London. The lack of concrete outcomes makes people reluctant to make big moves in the markets, keeping the atmosphere restrained. Looking at individual numbers, Germany and France show slight losses, while Spain has a tiny gain. The UK’s FTSE is flat. This cautious sentiment is also reflected in the US equity futures, which are gently dipping. The softness in S&P 500 futures indicates that traders prefer to manage their risks carefully. The dollar has weakened slightly against most currencies, whereas the Australian dollar is climbing and may test higher against the US dollar soon. Next week, the unclear direction from Washington and Beijing might continue this slow movement in the markets. For those working with options and futures, now isn’t the time for wild guesses. Geopolitical uncertainty takes time to resolve, and volatility pricing is currently low—like the VIX, which hasn’t spiked. This means many traders are holding back instead of hedging aggressively. Even if the slow movement in implied volatility looks tempting, it’s wise to avoid too much short gamma unless you’re sure about your entry points. Spreads in the major indices are tight for now but might widen if any significant news arises. Keep an eye on the premiums leading up to next Thursday’s expiries. If you need to make directional bets, doing so gradually is safer than making large investments at once. The dollar’s weakness has given pairs like AUD/USD a solid base. As the Australian dollar approaches 0.6500, we need to watch key resistance levels closely. A breakout above this range, supported by stronger commodity or data signals, could result in moderate moves in options gamma. Generally, carry trades aren’t appealing right now, so unless there’s more confirmation from rates or equities, any upside may be limited to intraday spikes. The energy sector is also worth noting. Recent crude inventory draws haven’t changed the overall sentiment, but expectations for seasonal demand could create a stronger foundation for related contracts. We’re keeping an eye on the commodity market since it influences volatility and broader inflation expectations, especially for inflation-sensitive options. In the coming days, patience is key. Traders should avoid rushing into uncertain outcomes. Use the information that’s available—especially earnings revisions, inflation surprises, and rate cues—before making directional trades or straddles that require movement. Delta-neutral strategies may seem attractive during this waiting period, but unless there are clear signs of rebalancing or institutional positioning, there’s no rush. It’s better to focus on preserving capital while the market remains compressed. That’s the sensible strategy for this week.

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