European stock markets bounced back from their slump on Friday, when US President Donald Trump dropped a 50% tariff threat on the continental bloc of nations, with arms maker Rheinmetall leading German’s bourse higher as investors welcomed the subsequent delay in any impost across the Atlantic.
Markets in the US and UK were closed for public holidays, keeping news flow light, and the upbeat tone is flowing through to futures markets, with the ASX set to rise today and S&P 500 futures pointing to a strong start for Wall Street when it wakes up.
The domestic earnings season takes a small breather today, with property company Asset Plus due to report.
And the kiwi dollar cooled from its six-month high, with the Reserve Bank’s Wednesday rate review the big local event this week.
Tried and true
Stocks in Europe rallied from their Friday slump after US President Donald Trump agreed to extend the deadline on his tariff threat for the continent until July 9, with Germany’s DAX 30 surging 1.7% led by a 3.3% gain for arms maker Rheinmetall.
European defence stocks have been among the strongest performers this year as governments beef up their military budgets as the Russian invasion of Ukraine drags on and as the backing of the US becomes less certain. Russia launched its heaviest drone attack on Ukraine after US President Trump rebuked his Russian counterpart Vladimir Putin.
Markets in the US and UK were closed for public holidays.
“The trade war de-escalation between the US and EU after escalating it on Friday, has caused some market volatility and temporarily diverted attention away from concerns about the state of US fiscal policy, which was last week’s theme,” Bank of New Zealand senior market strategist Jason Wong said in a note. “Many commentators have noted the backdown in the threat by Trump just follows his usual playbook, while continuing to affect uncertainty about the economic outlook.”
The kiwi dollar eased from a six-month high of 60.32 US cents yesterday, trading at 60 cents at 7am in Auckland from 60.24 cents at 5pm yesterday.
Australian futures are pointing to a 0.2% gain for Australia’s S&P/ASX 200 index, while S&P 500 futures are up 1.3%.
Virtual partners
Meanwhile, France’s CAC 40 gained 1.2%, with Capgemini advancing 1.6% after saying it’s partnered with artificial intelligence developer Mistral AI and software giant SAP to build new generative AI products.
Social media platform Trump Media & Technology Group rejected reports in the Financial Times that it plans to raise US$3 billion to buy cryptocurrencies such as bitcoin, which was up 1.3% at US$109,120.
And Canada welcomed King Charles III ahead of the British monarch’s opening of parliament on Tuesday in Ottawa, the first time the sovereign has carried out the task in 68 years.
There’s no major local data scheduled for today, while the domestic earnings season has a lull with property firm Asset Plus scheduled to report. The Reserve Bank's monetary policy review on Wednesday is expected to cut the official cash rate a quarter-point to 3.25%.
And telecommunications minnow Vital is expected to receive a takeover offer from a credible party when the NZX opens today.
Meanwhile, New Zealand’s Parliament will resume under urgency for politicians to continue debating budget legislation.
Reporting by Paul McBeth. Image from Christian Lue on Unsplash.
