European stocks steady as Trump takes office, easing tariff concerns, euro gains

From Investing.com: 2025-01-20 12:53:44

European stocks closed flat on Monday, hitting a three-month high on expectations of Trump refraining from increasing tariffs. The pan-European index closed at 523.87 points, up more than 2% over the previous week. The automobile sector, sensitive to tariffs, rose by 1.1%.

Trump will issue a trade memo directing federal agencies to evaluate trade relationships with China, Canada, and Mexico. In response, the U.S. dollar fell by 1% while the euro gained 1.2%. Markets welcomed a more measured approach from Trump, easing concerns over aggressive tariffs.

Despite initial gains, caution prevailed as Trump took office, sparking uncertainty over his protectionist policies. German stocks rose 0.4% while the Eurozone banking index surged 1.2%. Utilities fell 1.1%, with Nemetschek rising by 10.4% and Siemens Energy dropping by 3.4%.

German producer prices rose less than expected in December, increasing by 0.8% annually. ECB policymaker Holzmann warned against cutting interest rates if inflation rises faster than expected. The ECB is expected to trim rates by a quarter point at its policy meeting on Jan. 30.

The World Economic Forum in Davos, gathering political, business, and financial leaders, is a key event this week. U.S. markets were closed for Martin Luther King Day, leading to lighter trading volumes than usual.



Read more at Investing.com: European shares steady as Trump inauguration centre stage By Reuters