Global markets took a breather on Monday, as investors began to reassess the impact of US-China trade tensions. The one-month delay in tariffs on Canada and Mexico sent a signal that negotiations could be fruitful for China as well.
Canada’s Justin Trudeau and Mexico’s Claudia Sheinbaum made calls with President Donald Trump to bolster border enforcement efforts, which has sparked optimism among investors. Hong Kong shares surged, driven by electric vehicle makers, while the euro rebounded from a two-year low due to waning fears of an imminent trade war.
However, despite this relief, policy uncertainty remains a concern. European stock futures rose only 0.1%, and focus will shift to earnings announcements from major companies like Amundi, UBS, and BNP Paribas, as well as businesses with exposure to tariffs such as Ferrari and Infineon.
The key event on Tuesday will be Alphabet’s earnings report after market close in New York. The outcome of a conversation between President Trump and Chinese President Xi Jinping is also expected to shape markets, with the yuan’s trading band fixing under scrutiny.
Source: https://www.reuters.com/markets/europe/global-markets-view-europe-2025-02-04