As we dive into the week for European and global markets, there’s a cautiously optimistic tone following recent statements from U.S. President Donald Trump about tariffs. This comes soon after the Federal Reserve shared a positive view of the U.S. economy.
The S&P 500 futures are on the rise, following a modest gain last Friday when Trump indicated he might soften his stance. However, after a tumultuous start to his presidency, marked by tariff measures against China, Mexico, and Canada, investors are hesitant to place significant bets on Trump’s willingness to negotiate.
Trump expressed plans to talk with Chinese President Xi Jinping, and his trade representative is expected to engage with Chinese counterparts this week.
On Sunday, U.S. Senator Steve Daines and several executives from global corporations like Apple and Pfizer met with Chinese Vice Premier He Lifeng, receiving reassurances about the opportunities in China for business.
Monday brings the release of global purchasing managers’ index (PMI) data, which could support the recent spur in economic activity in Germany, France, and other European nations due to fiscal policies.
Over the weekend, there were reports from Bloomberg about U.S. efforts to broker a truce between Russia and Ukraine by April 20. Trump claims that efforts to ease the conflict are “somewhat under control.”
Yet, concerns linger among market participants over Trump’s proposed reciprocal tariffs affecting key trading partners.
Currently, tariffs seem inevitable, especially for the 15% of countries with the highest tariffs and substantial trade with the U.S., which Treasury Secretary Scott Bessent calls the “Dirty 15.”
Europe appears to be taking a conciliatory approach, deferring its countermeasures against the U.S. until mid-April. This decision means the 50% tariffs on American goods such as bourbon, wine, and toilet paper are being reconsidered.
France and Italy, who are leading wine exporters to the U.S., along with Ireland’s Prime Minister Micheal Martin, are eager to avoid a trade war, appreciating Europe’s strategic and composed response.
Beyond PMIs, the week offers plenty of data points, including the U.S. Federal Reserve’s preferred inflation measure, inflation numbers from Australia and Japan, a budget update from the UK, and significant earnings reports from China.
Last week, Federal Reserve officials acknowledged the U.S. economy’s resilience but justified a cautious policy stance due to economic uncertainties.
Meanwhile, in emerging markets, Turkey’s lira remains unstable as the imprisonment of President Tayyip Erdogan’s primary opponent continues to rattle investors.
Key events slated for Monday that could sway markets include speeches by Fed Governor Michael Barr and Bank of England Governor Andrew Bailey, as well as earnings announcements from companies like Hargreaves Lansdown PLC and Travis Perkins PLC. We’ll also see flash PMI readings from France, Germany, the UK, and the Euro Zone, along with debt auctions in France and Germany.
