(Bloomberg) — European stocks advanced after President Donald Trump sought to reassure about the outlook for the US economy and Ukraine accepted a proposal for a 30-day truce with Russia.
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The Stoxx 600 index rose 0.7%, set to end four days of declines, while contracts for US stocks edged higher after Trump said he doesn’t see a US recession, downplaying Wall Street’s jitters. Zealand Pharma A/S soared 40% after Roche Holding AG licensed its new weight-loss drug. Shares in Inditex SA fell after the Zara owner’s sales made a slow start to the year.
The dollar strengthened against all of its Group-of-10 peers and Treasuries ticked higher.
The latest international trade salvos were also in focus as the European Union retaliated with levies of its own after US import duties on steel and aluminum took effect.
Trump’s tariff policies, geopolitical realignments over Ukraine, sticky inflation and the unknown pace of Federal Reserve interest-rate cuts have battered markets this year, leaving US stocks on the verge of a correction.
“Any relief from all that geopolitical noise is a good thing for markets right now,” said Ken Wong, an Asian equity portfolio specialist at Eastspring Investments. News regarding a ceasefire in Ukraine and relief in the tariff tensions between the US and Canada are helping, he said.
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The VIX gauge of stock volatility is hovering near its highest since August, while a similar measure for Treasuries is at levels not seen since November as market participants remain nervous about US economic growth.
Trump told top executives gathered at a meeting of the Business Roundtable that he’s putting a priority on speedy approvals, particularly regarding environmental regulations, and planned to soon announce a major electricity project, according to a person familiar with the session. He also reiterated a suggestion that a company’s business taxes could be reduced if it manufactured its products in the US.
Growing skepticism over the US economic outlook prompted Goldman Sachs Group Inc. strategists to slash their target for the S&P 500, joining a growing chorus of banks that have expressed concerns over economic growth amid heightening geopolitical uncertainties.
For his part, Trump tried to damp concerns of a recession in the US economy.
“I don’t see it at all. I think this country’s going to boom,” he said at the White House. He added that markets “are going to go up and they’re going to go down. But you know what, we have to rebuild our country.”
On the geopolitical front, less than two weeks after Trump lambasted Ukrainian President Volodymyr Zelenskiy in an Oval Office confrontation, the US president put the pressure on Russia to accept a ceasefire agreement hammered out with Zelenskiy’s advisers.
The accord reached in Saudi Arabia by US and Ukrainian negotiators for a 30-day halt in the conflict, which began with Russia’s full-scale invasion three years ago, now hinges on Russian President Vladimir Putin.
“With risk appetite at extreme bearish levels, there may be room for sentiments to stabilize and a tactical bounce in the near term,” wrote Jun Rong Yeap, market strategist at IG Asia Pte. “Any recovery could remain fragile without a clear catalyst.”
Trump’s latest tariffs on steel and aluminum imports came into force Wednesday, extending his trade wars to more of the US’s top trading partners in a risky bid to revive an industrial base that migrated over decades to foreign competitors. The president announced his plan last month to impose 25% duties on the metals.
The EU launched countermeasures to the new US tariffs on steel and aluminum with plans to impose duties on American goods worth €26 billion ($28.3 billion). The European Commission, the EU’s executive arm, said in a statement that it would move forward with “swift and proportionate” measures.
Investors will also be looking to the US consumer inflation reading later Wednesday. The consumer price index is seen advancing 0.3% in February after a 0.5% gain at the start of the year.
Markets “will be wary of further signs of sticky prices,” said Kyle Rodda, a senior analyst at Capital.com in Melbourne. “Further evidence of inflation stuck at current levels will raise concerns that the Fed will lack the wiggle room to cut rates if Trump’s economic policies cause a precipitous slowdown in economic growth.”
In commodities, oil extended a gain as the US cut its forecast for a global oversupply. Gold held its advance, supported by haven demand.
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Key events this week:
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Canada rate decision, Wednesday
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US CPI, Wednesday
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Eurozone industrial production, Thursday
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US PPI, initial jobless claims, Thursday
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US University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.7% as of 8:07 a.m. London time
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S&P 500 futures rose 0.3%
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Nasdaq 100 futures rose 0.4%
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Futures on the Dow Jones Industrial Average rose 0.2%
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The MSCI Asia Pacific Index was little changed
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The MSCI Emerging Markets Index was little changed
Currencies
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The Bloomberg Dollar Spot Index rose 0.2%
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The euro fell 0.1% to $1.0907
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The Japanese yen fell 0.5% to 148.45 per dollar
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The offshore yuan fell 0.3% to 7.2451 per dollar
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The British pound fell 0.1% to $1.2932
Cryptocurrencies
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Bitcoin fell 0.4% to $82,463.43
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Ether fell 1.2% to $1,913.5
Bonds
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The yield on 10-year Treasuries was little changed at 4.27%
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Germany’s 10-year yield advanced two basis points to 2.92%
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Britain’s 10-year yield advanced one basis point to 4.69%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess and Chris Bourke.
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