Europe Markets Weekly — 2026-04-29

Market Snapshot

• STOXX 600: Down ~2.54% for the prior week (w/e April 25); recovered modestly on April 28, up ~0.1% intraday
• DAX: Up 0.42% on April 27 to 24,231.11; intraday -0.27% on April 28
• FTSE 100: Up 0.04% on April 27
• CAC 40: Up 0.19% to 8,173.54 on April 27; slipping to 8,104.09 (-0.46%) on April 28

Key Drivers

• Earnings season steers sentiment: European equities edged higher on April 28, snapping a three-session losing streak, as investors shifted focus to a packed corporate earnings calendar while U.S.-Iran diplomatic talks remained stalled. The session marked a tentative pivot from macro fears to company fundamentals.

• Inflation expectations spike, complicating ECB calculus: The ECB's Consumer Expectations Survey for March 2026 showed median eurozone inflation expectations for the next 12 months jumped to 4.0%, while a separate ECB survey of firms found near-term inflation bets surging due to the Iran war — though longer-term expectations held steady and wage growth is seen moderating. The divergence deepens the ECB's policy dilemma ahead of its upcoming rate decision.

• Defensive sectors outperform amid Hormuz uncertainty: With the Strait of Hormuz remaining largely closed and peace negotiations stalled, traditionally defensive sectors — utilities and telecoms — continued to show relative strength, while cyclicals lagged. The prior week's STOXX 600 decline of 2.54% reflected broad risk-off positioning.

Earnings & Corporate

• Deutsche Bank posts record profit: Deutsche Bank recorded its highest-ever profit under CEO Christian Sewing and revised its 2026 investment bank revenue forecasts upward, providing a notable bright spot in the European financial sector and contributing to the broader mid-week market recovery.

• Nordex surges 9.8% on strong Q1 results: German wind turbine manufacturer Nordex jumped to the top of the STOXX 600 on April 27, spiking 9.8% in afternoon trading after reporting a strong first-quarter earnings result — a standout performer in an otherwise cautious session as investors sought pockets of resilience.

Geopolitics & Energy

• Brent crude spikes above $110 on Iran escalation and UAE OPEC exit: Oil surged to above $110 per barrel as fears grew that the U.S.-Iran conflict could drag into a prolonged war. A shock exit by the UAE from OPEC also rattled energy markets, raising questions over a broader Middle East energy realignment and adding a new supply-side variable to an already volatile market.

• EU sanctions to ban Russian Yamal LNG condensate imports: New EU sanctions published in the bloc's official journal will ban condensate imports from Russia's Yamal LNG and other Russian projects from January 1, 2027. The measure — part of ongoing European efforts to reduce energy dependence on Russia — follows the adoption of the EU's 20th sanctions package, which also targeted Russian oil flows.

What to Watch Next Week

• ECB rate decision: The European Central Bank's upcoming policy meeting is the key macro event, with markets weighing whether the surge in near-term inflation expectations will push the ECB toward a hike or whether stalling eurozone growth keeps it on hold.
• European corporate earnings: The Q1 earnings season continues at pace; STOXX 600 companies are expected to report average earnings growth of 2.8% for Q1 2026 according to LSEG I/B/E/S data — with energy majors likely to be the key outliers to the upside.
• Iran ceasefire negotiations and Strait of Hormuz status: Any diplomatic breakthrough — or further breakdown — in U.S.-Iran talks will be the single biggest driver for European equity and energy markets. The UAE's OPEC exit adds another layer of Middle East energy politics to monitor closely.