Stocks climbed in Europe and Asia alongside S&P 500 futures as investors trained their focus anew on the U.S.-China trade arena. Treasuries and core European bonds steadied with gold after Monday’s slump.
Gains in miners and carmakers pulled the Stoxx Europe 600 Index higher, though Ted Baker shares bucked the trend, falling a record 30% as the U.K. retailer cut its outlook. German stocks were the best performers as exchanges there re-opened after a holiday. In Asia, China equities outperformed after news that local governments will have more room to spend on infrastructure helped offset President Donald Trump’s threat to raise tariffs again if President Xi Jinping doesn’t meet with him at the Group of 20 summit at month’s end.
Iron ore futures surged on the China spending plan, and the onshore yuan recovered after closing at its weakest level of the year. Emerging market stocks gained, while oil edged back near $54 a barrel in New York.
Sentiment has turned cautiously optimistic with investors looking to the G-20 summit in Japan as the next way-station in the trade dispute between the world’s two largest economies. Keeping the tension elevated, Trump told reporters on Monday that he could impose tariffs of 25%, or “much higher than 25%” on $300 billion in Chinese goods.
“The market will be a little volatile going into the G-20 just as you hear whispers around how trade negotiations are likely to unfold,” Caleb Silsby, Whittier Trust chief portfolio manager, told Bloomberg TV. It’s likely the market has priced in a “fairly decent resolution” on trade so any disruption would lead to increased volatility again, Silsby
Elsewhere, Mexico’s peso stabilized after posting its best day in almost a year, up 2.1%, after the accord with the U.S. late Friday.
Here are some key events coming up:
And these are the main moves in markets: