European Markets Rise as Investors Shift Focus Amid Euro Drought Concerns

Citigroup strategists say Europe is the only region where global risk appetite has improved, driven by fresh capital inflows and earnings that beat expectations. The Stoxx 600 gained 0.7% in the latest week and is up about 5% since early June, while the U.S. S&P 500 remained flat and Asian markets face AI‑related positioning splits. Citi analyst David Chew highlighted the European Central Bank’s unchanged rates and strong Q2 earnings as key support for equities.

Meanwhile, Dutch bank ING warns that persistent drought across Europe could curb the euro’s advance against the dollar. Analyst Chris Turner notes record‑low water levels in the Rhine River, threatening inland transport and adding pressure on the euro’s upward momentum. He projects that if the euro breaks the 1.1550‑1.1560 resistance band, it could climb to 1.1615‑1.1620, but current drought conditions may limit that rise.