Markets climb on positive signs in US tariff battles

The world’s stock markets mostly rose yesterday, with investors seeing positive signs amid trade tensions between the US and China -- and the US and Mexico -- that offset lingering concerns of a global economic slowdown.

In Europe, Frankfurt’s DAX 30 index was the lead performer, up more than one percent in afternoon trading even though data showed eurozone inflation dropped sharply in May, a possible sign of a slowdown sparked by the US-China trade war. Wall Street opened strongly as well, with Briefing.com analyst Patrick O’Hare saying the market was “reportedly in a better mood because it is less depressed about the trade issues”.

Fears of an economic slowdown have mounted in recent days after US President Donald Trump threatened Mexico with tariffs, adding to anxieties over the Washington-led trade war with Beijing. O’Hare said Tuesday’s positivity “stems from a Washington Post article that indicates GOP lawmakers are discussing the possibility of holding a vote that could potentially block President Trump’s tariff plan for Mexico.”

He added that there was also “a declaration from China’s Ministry of Commerce that it hopes the US can meet half way in trade negotiations”. During a visit to London however, Trump showed no sign of backing down on the Mexican tariffs, saying Mexico must stop the “invasion” of migrants trying to enter the US.

In comments more likely to be welcomed by the markets, he also said that “everything is on the table” in trade talks with Britain after it leaves the EU and that he was certain Washington and London would reach an understanding on China’s telecoms giant Huawei that could avoid disruption in intelligence-sharing.