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Trump delays EU tariffs

US stocks closed lower on Friday amid new tariff threats from US President Donald Trump, but markets found some relief to start the new week after Trump agreed to postpone tariffs against the EU until July over the weekend. The euro surged and the US dollar weakened against major currencies on Monday as traders reacted to the delay as well as the prospects of higher US debt due to Trump’s tax and spending bill, which is moving through Congress. Asian markets were mixed on Monday, with regional currencies gaining against the US dollar.

  • Data
  • Autore Shane Strowmatt, LGT
  • Tempo di lettura 5 minuto

The Strategist EU trade
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US stock indices closed lower on Friday due to new tariff threats from Trump. The Dow Jones Industrial Average fell by 0.6% to 41,603.07 points, while the S&P 500 and Nasdaq 100 dropped by 0.7% and 0.9%, respectively. Trump's threat to impose a 50% tariff on EU products by 1 June, coupled with specific threats against Apple, led to market volatility. The CBOE Volatility Index - a gauge of market fear - surged nearly 10%. On Sunday, Trump agreed on Sunday to postpone the imposition of 50% tariffs on European Union imports until July 9, following a request from European Commission President Ursula von der Leyen.

Euro climbs, US dollar falls as Trump delays EU tariffs

The euro surged on Monday, after Trump postponed the imposition of tariffs on European Union shipments. Concurrently, the US dollar weakened against major peers, including the yen and Swiss franc, amid concerns over Trump's expansive tax and spending bill. The US dollar index fell 0.3% to 98.87, extending a 1.9% decline from last week.

Asian stocks mixed, currencies gain against US dollar

Stocks in the Asia-Pacific region were mixed on Monday, while currencies in the region were making gains versus the US dollar. In foreign exchange, the Australian dollar, the South Korean won, the Japanese yen and Singpapore dollar all strengthened versus the US dollar. In equities, Japan’s Nikkei 225 was trading 1% higher, while Korea’s Kospi rose 1.2%. Australia’s S&P/ASX 200 was essentially flat. In contrast, Hong Kong’s Hang Seng Index slipped 1.3% and mainland China’s CSI 300 dropped 0.8%.

Inflation and GDP data in focus

This week, markets are focused on key economic indicators from major economies. The United States releases its second-quarter GDP data on Thursday, followed by the core Personal Consumption Expenditures price index on Friday. In Europe, Germany's Consumer Price Index is set for release on Friday, providing insights into inflation trends in the euro area. Meanwhile, the Tokyo Consumer Price Index on Friday will offer an early indication into national inflationary pressures in Japan. Additionally, the Reserve Bank of New Zealand announces its interest rate decision on Wednesday.

German GDP up 0.4% in first quarter

Germany's gross domestic product (GDP) rose by 0.4% in the first quarter of 2025 compared with the previous quarter, according to data released on Friday by the Federal Statistical Office. This growth, driven by increased exports and manufacturing output, was 0.2 percentage points higher than initially estimated. However, GDP decreased by 0.2% year-on-year after price adjustment, reflecting ongoing challenges in investment and the construction sector. European stock indices fell sharply on Friday. The Euro Stoxx 50 declined by 1.8%, while Germany’s DAX and France’s CAC 40 dropped 1.5% and 1.7%, respectively. The Swiss Market Index also retreated, down 0.6%.

UK retail sales surge in April

British retail sales volumes rose by 1.2% in April, significantly exceeding expectations, driven by sunny weather, according to data released by the Office for National Statistics on Friday. This marks the fourth consecutive monthly increase, the longest such streak since 2020. Consumer confidence also improved in May, likely influenced by lower interest rates and easing global trade tensions. Despite this growth, retail sales are still 0.6% below their 2019 average, with challenges ahead due to increased costs for retailers.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: There are no major macroeconomic data releases scheduled today.

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.