LONDON: European and Asian stock markets rose Tuesday as tariff threats eased and as investors grow increasingly confident that the US Federal Reserve will cut interest rates next month.
The gains, helped also by some strong earnings, tracked Monday’s rally on Wall Street.
The dollar jumped against the euro and yen.
Oil prices retreated after US President Donald Trump‘s threat to raise tariffs on India over its purchases of Russian crude.
“European markets continue to wave off any concerns around the direction of travel for the US economy and Thursday’s looming tariff day,” noted Joshua Mahony, chief market analyst at Rostro trading group.
Trump‘s fresh tariffs on dozens of US trade partners are set to kick in on August 7, almost one week later than planned.
The European Union on Tuesday announced the suspension of its retaliatory tariffs on US goods worth 93 billion euros ($107 billion) after Brussels struck a deal with Washington last month.
“The commission has today adopted the necessary legal procedures to suspend the implementation of our EU countermeasures, which were due to kick in on August 7,” EU trade spokesman Olof Gill said.
Ahead of the new deadline, Mahony said traders were focused “on the continued strength seen in second-quarter earnings season and the new dovish outlook for the Federal Reserve”.
Weakness in the US jobs market has raised concerns that the world’s biggest economy is in worse shape than expected, fanning bets that the Fed will cut interest rates in September.
Some analysts remained sceptical, however.
“I continue to believe the Fed will not reduce rates at all this year given rising inflation caused by tariffs and a relatively stable unemployment rate,” said Lazard chief market strategist Ronald Temple.
On the corporate front, shares in BP climbed 2.4 percent in London midday deal after the British energy giant surprised with better-than-expected earnings in the second quarter.
© New Straits Times Press (M) Bhd
