European Stocks Rebound. AstraZeneca Plunges 9%. Bund Yields Ease From a Two-Month High. Oil Retreats. The Dollar Still Cannot Find a Haven Bid

CAC 40 up 0.6%. DAX up 0.7%. ASML +2.6%, Infineon +3.1%, STMicro +3.7%. FTSE 100 in the red: AstraZeneca down over 9%, its worst day since 2017, after Wainua failed a late-stage cardiac trial. Bund 10Y easing to 3.06% from Wednesday’s two-month high of 3.10%. EUR/USD climbing toward 1.1450 — German trade surplus €19.1B (vs €14.5B prior). GBP/USD at a three-week high above 1.3400. Oil retreating nearly 2% to $73.10. Silver bouncing to $59.12 from Wednesday’s $57.22 low. Crypto holding losses: BTC near $62,300, Fear & Greed at 22.

HIGHEST CONVICTION: Fade the EU 5-year Bund yield rise toward 2.90%. The hawkish ECB repricing looks stretched relative to an oil shock that is potentially reversible if Qatar-mediated diplomacy gains traction.

Two Markets Inside One European Session

Thursday’s European session is a cautious rebound built on a fragile premise: that the Iran situation will de-escalate again, just as it did in June. The Stoxx 600 is up around 0.5%, led by semiconductor names — ASML up 2.6%, Infineon up 3.1%, STMicroelectronics up 3.7% — following strong investor demand for SK Hynix’s US share offering. France’s CAC 40 has recovered around 0.6% of Wednesday’s 2.2% slide. Germany’s DAX is up around 0.7%. The broader rally is happening on reports that Qatar is pressing Tehran to honour the existing memorandum of understanding and contain the escalation.

London is the session’s obvious exception. The FTSE 100 is in the red because AstraZeneca, its second-largest constituent, has plunged more than 9% — its steepest one-day fall since 2017 — after its gene-silencing drug Wainua, developed with Ionis Pharmaceuticals, failed a late-stage trial to prevent cardiac complications. One failed drug trial is erasing more index points than three European chipmakers are recovering.

The entire continental rebound rests on the assumption that Qatar’s mediation succeeds. Trump declared the ceasefire MoU ‘over.’ Iran has threatened large-scale retaliation. These are not conditions that typically produce bounce-and-hold equity moves.

The Dollar That Cannot Find a Haven Bid

EUR/USD is climbing toward 1.1450, near 1.1435, on a day when the dollar would traditionally benefit from geopolitical risk-off flows. The explanation is the same one that explained USD/JPY’s muted reaction in the Asian session: markets are not treating this Iran escalation as a true haven-demand event. They are treating it as a negotiating escalation that is likely to resolve, which means risk-on reflexes are competing with haven reflexes and producing a muddled dollar outcome.

The German trade surplus for May came in at €19.1 billion, well above April’s €14.5 billion, with exports rising and imports falling. That is a modest EUR-supportive beat. It is not enough on its own to push EUR/USD materially higher, but it adds to the argument that European external demand remains resilient. The pair’s broader bearish trend since the April-June downfall is technically intact. The 4H RSI is below 60, MACD is only mildly positive. The upper bound of what the article identifies as a bearish flag pattern is near 1.1450. A confirmed close above 1.1480 would be the first genuinely constructive signal.

EUR/USD — BUY DIPS  E 1.1400  /  SL 1.1360  /  TP 1.1480

GBP/USD at a Three-Week High: Political Uncertainty Is Fading

GBP/USD at 1.3404, holding just above the 1.3400 handle, is a story about what has stopped happening rather than what has started. Keir Starmer’s late-June resignation removed the political uncertainty that had been a sterling headwind for weeks. The replacement process has been orderly enough that markets have not re-priced a major fiscal risk event. UK data overnight was supportive without being decisive: the RICS housing survey showed the downturn “eased a little” in June; pay awards held steady at 3.5%, consistent with contained wage pressure.

The article notes Sterling’s rebound from this week’s low near 1.3304 has been steady rather than explosive — more a function of fading UK-specific risk than a broad dollar rout. The 1.3375 buy-dip level and 1.3335 stop provide a defined risk framework into today’s US jobless claims at 13:30 BST.

GBP/USD — BUY DIPS  E 1.3375  /  SL 1.3335  /  TP 1.3470

Bund Yields, ECB Repricing, and the Inflation Scare

Germany’s 10-year Bund yield has eased slightly to 3.06% from Wednesday’s two-month high near 3.10%, but the 5-year yield remains near 2.78% and traders are pricing over 30 basis points of additional ECB tightening this year. ECB Executive Board member Isabel Schnabel’s Thursday warning that the Iran conflict’s economic impact on inflation “persists” reinforced the hawkish narrative. Germany’s cabinet also approved its 2027 budget draft with planned spending of €555.4 billion and borrowing raised to €203.6 billion from the earlier €196.5 billion estimate — a fiscal-expansion signal that adds modest upward pressure to the long end of the Bund curve.

The article’s contrarian call: the 5Y Bund yield rise toward 2.90% looks stretched relative to an oil shock that could reverse quickly if Qatar’s mediation succeeds. The ECB’s 23 July meeting is the event-risk window.

Chinese June PPI also landed at 4.1% year-on-year, the strongest reading since July 2022, feeding the global reflation narrative that is underpinning the bond sell-off. Marine Le Pen’s confirmation of her 2027 French presidential bid adds a modest additional headwind via the OAT-Bund spread.

EU 5Y Bund Yield — BUY YIELD DIP (BEARISH PRICE)  E 2.70%  /  SL 2.62%  /  TP 2.90%

Silver Bounces, Natural Gas Pulls Back, Oil Retreats

Silver at $59.12 is the metals story of the European session. Wednesday’s slide to a two-week low of $57.22 was driven by the same oil-driven inflation scare that hit bonds. Thursday’s rebound has reclaimed the former $59.06 resistance zone, which now acts as support, and the 4H RSI has moved back above 50. The Silver Institute estimates a sixth consecutive annual supply deficit in 2026 near 46 million ounces, with industrial demand from solar, EVs, and AI data-centre infrastructure outpacing mine supply that cannot be scaled quickly. The structural floor is real. The entry is $58.20, stop $57.20, target $61.55.

Natural gas has pulled back to around $3.20 per MMBtu, down roughly 3.9% after this week’s heatwave-driven surge that had taken the contract toward $3.35. Lower 48 production has eased slightly to 109.4 billion cubic feet per day from June’s 110.0 bcfd, while LNG export flows have risen to 18.1 bcfd from 17.4 bcfd. European TTF remains elevated near €49 per MWh — storage at 49% versus nearly 60% a year ago, plus reduced Norwegian pipeline flows from extended maintenance. Thursday’s EIA storage report is the near-term catalyst.

WTI is down nearly 2% to around $73.10, giving back a slice of two sessions of near-10% gains. The Hormuz risk premium keeps a floor under prices even as the pullback reflects pure profit-taking after an outsized move. The unresolved ceasefire situation means this is not a structural oil bear trade — it is profit-taking on a move that had gone far and fast.

Silver XAG — BUY DIPS  E $58.20  /  SL $57.20  /  TP $61.55

Nat Gas HH — BUY DIPS  E $3.18  /  SL $3.04  /  TP $3.55

Ethereum and XRP: The Crypto Holdouts From the Rebound

Ethereum at $1,752.22 is bouncing but testing the $1,765 resistance zone even as the broader crypto market remains in Extreme Fear at a Fear and Greed reading of 20. The total crypto market capitalisation has fallen 2.1% over 24 hours to around $2.21 trillion. Bitcoin dominance near 56% — capital sitting in BTC rather than rotating to ETH or altcoins — is the structural headwind. On-chain activity is constructive: Uniswap V4 fees up over 50% in the past week, Fluid DEX volumes up nearly 94% over 30 days per DefiLlama. The newly launched Ethereum Institutional nonprofit aims to support institutional deployment. None of it is enough to overcome the macro-driven fear cycle. The article’s framework is to sell the rally toward $1,765.

XRP at $1.069 is holding just above the psychological $1 level. Ripple this week secured a full Crypto-Asset Service Provider licence under the EU’s MiCA framework from Luxembourg’s regulator — removing a longstanding compliance overhang. Whale activity and new XRP Ledger wallet creation have hit multi-month highs. The US CLARITY Act — which would classify XRP as a commodity under federal law — has slipped from its July 4 target; the Senate does not return from recess until July 13 and a floor vote is now more likely late July or early August. Buy the dip toward $1.02 with the MiCA licence as the medium-term catalyst.

Ethereum ETH — SELL RALLIES  E $1,765  /  SL $1,805  /  TP $1,655

XRP — BUY DIPS  E $1.02  /  SL $0.98  /  TP $1.14

Read Full Report: https://www.capitalstreetfx.com/market-analysis/european-markets-chip-rally/