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European stocks rebound on US tariff deadline extension

European shares surged on Monday, with the STOXX 50 index rising by 1.3%, after US President Donald Trump extended the deadline for imposing a 50% tariff on European goods to July 9. US markets were closed on Monday for a public holiday, while Asian stocks were mixed on Tuesday. Gold prices fell, trading around USD 3320 per ounce, while bitcoin was trading just below all-time highs around USD 108,700.

  • Date
  • Author Shane Strowmatt, LGT
  • Reading time 5 minutes

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European stock indices surged on Monday on the tariff relief. Germany’s DAX climbed 1.7% and France’s CAC 40 advanced 1.2%. The Swiss Market Index increased by 1.1%. Defence stocks led European sector gains, while automobiles and parts also rebounded. The euro also strengthened against the US dollar, hitting its highest level since late April on Monday, as investors shifted focus away from US assets amidst rising economic concerns.

Euro could rival dollar, according to Lagarde

European Central Bank President Christine Lagarde stated on Monday that the euro could become a viable alternative to the dollar if the euro area's financial and security frameworks are strengthened. Highlighting the decline in the dollar's dominance, which now constitutes 58% of international reserves compared to the euro's 20%, Lagarde emphasised the need for deeper capital markets, improved legal foundations, and stronger security commitments. She also suggested that Europe should promote the euro for international trade invoicing and enhance cross-border payments to increase its global influence.

China's industrial profits rise in April

China's industrial profits increased by 3% in April, supported by Beijing's policies despite high US tariffs. For the first four months of the year, profits grew 1.4%, driven by gains in equipment and high-tech manufacturing sectors. State-owned firms saw a 4.4% decline in profits, while private and foreign-invested enterprises experienced increases. Analysts credit Beijing's measures for offsetting tariff impacts and supporting the private sector. Hong Kong’s Hang Seng Index was essentially flat on Tuesday, and mainland China’s CSI 300 dropped 0.5%.

Japan loses top creditor spot to Germany

Japan's net external assets reached a record 533.1 trillion yen (USD 3.73 trillion) in 2024, marking a 12.9% increase from the previous year, driven by a weak yen and robust overseas acquisitions, according to data released by the Ministry of Finance on Tuesday. Despite this growth, Japan lost its position as the world's top creditor to Germany. Japan’s Nikkei 225 was trading 0.4% higher on Tuesday. Elsewhere in the Asia-Pacific region, equity markets were mixed with Korea’s Kospi falling 0.6% and Australia’s S&P/ASX 200 up 0.5%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Scotiabank, Vienna Insurance, and Xiaomi. Annual general meetings at Daimler Truck and Zalando.

Economic data in focus: German GfK Consumer Climate (08:00), Swiss trade balance (08:00), US durable goods orders (14:30), US Conference Board Consumer Confidence Index (16:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.