On Monday, stock markets weakened as sentiment remained fragile.
It was after the latest outbreak in the U.S.-China trade war sent investors struggling into government bonds and beaten by the evolving market currencies.
European equity markets had observed to follow Asian markets deep into debt. But they improved when U.S. President Donald Trump moved to ease tensions with China after more tariffs.
This was shortly announced on Friday as deepened concerns about the impact of the conflict on global growth continued.
In addition, Trump greeted Chinese President Xi Jinping as a great leader and indicated he saluted his desire for a trade deal and for calm.
This has calmed investors’ worries. After that, Beijing has called for peace.
Meanwhile, Wall Street futures gathered with S&P 500 e-minis above 0.5% ahead of the open.
European stock markets were mixed with the pan-European Eurostoxx lower slightly on the day.
Germany’s DAX grew 0.29% while France’s CAC managed a 0.5% increase.
London markets were closed for a holiday.
Stocks had declined sharply in Asia. It was before Trump negotiated and investors panicked regarding the latest tit-for-tat tariffs that would impact the global growth.
Exposed in Reprisal Tariffs
On Friday, Trump declared an additional duty on some $550 billion of targeted Chinese goods. This was hours after China revealed punitive tariffs on $75 billion worth of U.S. goods.
The MSCI world equity index, which tracks shares in 47 countries, persisted 0.3% lower.
A European strategist at Raymond James, Chris Bailey, said, “Trump is clearly potentially exposed to a slower U.S. economy impacting his capability to be re-elected.”
In addition, “He is aware of this and so reacts to market volatility with some kinder words.”
Lastly, “The Chinese have seen him blink and have filed this away for use later. Shorter-term I think this is the basis of some tentative deal.”
Despite the more positive tone in stock markets, assets believed safe havens remained well-maintained.
The 10-year U.S. Treasury bond yield hit a new 3-year low at 1.449%. It was before mounting to 1.518% but still a touch lower on the day.
So far this month, it is down some 50 basis points.
The price of gold has climbed sharply in recent months as nervous investors gathered to the precious metal. The metal has reached its highest since April 2013 and was last up 0.3% at $1,531.
Germany Bund yields did opposite movement on their earlier falls. The 10-year bond grew 1 basis point to -0.664%, having an earlier decline to as low as -0.70%.
- Trading Instrument