European stock markets posted slight increases on Wednesday, while the US dollar remained stable. Investors are closely watching developments in the US trade talks with China and tariff policy.
President Donald Trump had informed trading partners that they needed to submit their proposals to avoid the Independence Day tariffs by Wednesday. These tariffs will take effect within five weeks. Meanwhile, increased US tariffs on steel and aluminum imports went into effect today. However, Britain was exempted from this regulation by reaching a preliminary agreement.
The MSCI All Countries World Index reached a new record high due to the recent weakening of the dollar. However, investors remained cautious ahead of the expected phone call between Trump and Chinese President Xi Jinping this week, and trading volumes remained low.
A post by Trump on the Truth Social platform overshadowed the early optimism in European markets.
Trump said, “I like President Xi, I always have, but HE IS A VERY DIFFICULT PERSON, EXTREMELY DIFFICULT TO DEAL WITH.” Despite all this uncertainty, the EU Trade Commissioner described his talks with the US as “constructive and productive.” Wall Street futures showed slight upward signs: Wall Street futures rose slightly. Nasdaq and S&P 500 e-mini futures rose 0.2%. showed.In money markets:
- Dollar index remained stable at 99.202.
- Euro rose by 0.1% to $1.1383 against the dollar
Amundi’s Senior Multi-Asset Portfolio Manager, Amelie Derambure, stated that she was surprised by the calm of the markets despite the risks associated with the tariffs:
“Markets seem confident that the Trump administration will not undermine US growth,” she said. However, she warned that volatility could increase as the tariff implementation date approaches.
Trump’s unpredictable tariff policy has driven some investors away from US assets, while increasing demand for gold and other safe havens. This also raises concerns about broader economic implications.
Investors are now looking to upcoming US economic data. In particular, the monthly employment report to be released on Friday could provide clues about how companies are responding to the tariffs.
Derambure made the following assessment:
“So far, markets are assuming that trade uncertainty hasn’t seriously impacted corporate behavior. However, if the data weakens or companies start to appear more cautious, we could see a rapid market correction.”
