(Bloomberg) — The euro gave up an advance against the dollar after President Donald Trump signaled he’s about to announce reciprocal tariffs on trading partners.
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Trump said in a social media post the new levies will be announced on Thursday. Gold rose and the Swiss franc and the yen outperformed as investors sought haven assets. A gauge of dollar strength pared its decline. Futures contracts on the S&P 500 and Nasdaq 100 kept to narrow ranges.
The euro earlier climbed as much as 0.6% on optimism that US-Russia talks could end the Ukraine war. Oil fell on speculation that risks to Russian supply may ease, and Ukraine dollar bonds rose the most among emerging-market peers.
Aside from tracking developments over tariffs and Ukraine, Wall Street is preparing for a fresh batch of US economic data including initial jobless claims and producer-price inflation. Wednesday’s hot consumer price index numbers forced traders to push out bets on the next Federal Reserve interest-rate cut to December.
Treasuries rose across the curve, a day after their biggest selloff since December. Bond markets are focusing on the PPI figures due later and an auction of 30-year US government bonds to gauge whether Wednesday’s sharp decline was justified.
The pound strengthened after Britain registered unexpected economic growth at the end of 2024. Gross domestic product rose 0.1% in the fourth quarter, an acceleration from the flat performance in the third quarter. It was better than the 0.1% fall expected by economists and the Bank of England.
European stocks rallied as much as 0.9% to a record high, lifted by positive earnings updates from the likes of Nestle AG and Siemens AG and optimism over a potential peace deal between Russia and Ukraine.
“An end to the conflict could eliminate war-related costs, particularly in energy, reduce uncertainty, and potentially boost business confidence and investment—crucial for Europe’s largest economies,” said Susana Cruz, a strategist at Panmure Liberum. “While sectors like defense might face a temporary selloff, this is likely to correct over time, as recent conflicts have underscored the need for increased defense spending.
Trump agreed in a phone call with Russian President Vladimir Putin to start negotiating an end to the war in Ukraine. Trump revealed the conversation — his first publicly announced contact with Putin since retaking the US presidency — on social media.
“No concrete announcements, but the market reacted to the fact that discussions are starting,” said Georgios Leontaris, chief investment officer for EMEA at HSBC Global Private Banking. “There is still a long way, there is a lot to talk about. But the fact that the discussions are starting was reflected in the pricing of European assets.”
Corporate Highlights:
Deere & Co. shares slid in pre-market trading as the world leader in farm machinery anticipates another challenging year.
Molson Coors Beverage Co. reported profit that beat expectations, with a lift from sales outside of the US.
KKR & Co. is considering investing in Nissan Motor Co., people familiar with the matter said, after the struggling Japanese automaker’s talks to combine with rival Honda Motor Co. failed.
Barclays Plc shares plunged the most in six months after the British bank left its earnings guidance for next year unchanged.
Unilever Plc will list its ice cream unit in Amsterdam, London and New York, as the consumer goods company said it expects a modest improvement in profitability this year and began a share buyback.
Siemens shares jumped as robust demand for the company’s electrification products boosted revenues and a long-standing slump in factory-automation sales showed signs of abating.
Commerzbank AG announced a plan to substantially lift profitability over the coming years as Chief Executive Officer Bettina Orlopp seeks to bolster the lender’s defense against a potential takeover by rival UniCredit SpA.
Nestle is seeking to lift sales growth from historically low levels by increasing prices for products such as coffee amid escalating commodity costs, while at the same time reining in expenses.
British American Tobacco Plc shares fall as much as 8.5%, the most in more than a year, after the company’s FY25 guidance for revenue growth came in below consensus estimates. Analysts say the disappointing outlook is due to excise changes in Bangladesh as well as regulatory changes in Australia, although they note that 2024 results were in line with expectations.
Key events this week:
Eurozone industrial production, Thursday
US initial jobless claims, PPI, Thursday
Eurozone GDP, Friday
US retail sales, industrial production, business inventories, Friday
Fed’s Lorie Logan speaks, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 8:11 a.m. New York time
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 rose 0.8%
The MSCI World Index rose 0.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0392
The British pound rose 0.2% to $1.2473
The Japanese yen rose 0.4% to 153.78 per dollar
Cryptocurrencies
Bitcoin fell 1.8% to $95,869.7
Ether fell 0.8% to $2,662.17
Bonds
The yield on 10-year Treasuries declined two basis points to 4.60%
Germany’s 10-year yield declined four basis points to 2.44%
Britain’s 10-year yield declined one basis point to 4.53%
Commodities
West Texas Intermediate crude fell 1.4% to $70.35 a barrel
Spot gold rose 0.4% to $2,916.65 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu and Margaryta Kirakosian.
