European stocks are anticipated to open on a lower note on Tuesday, following U.S. President-elect Donald Trump's dismissal of a Washington Post report as "fake news." The report suggested he might retract his plans to impose tariffs.
Upon assuming office on January 20, Trump is anticipated to implement a 10 percent tariff on global imports entering the U.S. and a 60 percent tariff on Chinese imports. Economists have cautioned that such actions could elevate inflation, potentially leading to prolonged higher interest rates in the U.S.
On Monday, the dollar experienced a recovery in Asian markets, rebounding after an intraday decline of up to 1 percent.
The Canadian dollar saw an uptick after Prime Minister Justin Trudeau announced his resignation as the head of the Liberal Party, initiating a leadership contest.
Gold experienced a slight increase as investors awaited further U.S. economic data, hoping for additional insights into the Federal Reserve's interest rate plans.
The release of Federal Reserve minutes, alongside reports on job openings and the upcoming non-farm payrolls report, could provide investors with greater clarity on the Fed's 2005 monetary policy direction. Key Fed officials, including Mary Daly and Adriana Kugler, have advocated for a cautious approach to rate reductions, aligning with Richmond Fed President Thomas Barkin's restrictive position to mitigate inflation risks.
Treasuries remained mostly unchanged after 30-year note yields climbed to their highest level in over a year. Oil prices remained stable after experiencing their first decline in six sessions.
Trading later in the day might be influenced by the release of Eurozone CPI and unemployment figures, as well as U.S. reports on the trade deficit, service sector activity, and job openings.
Asian stocks presented a mixed picture, with Japan's Nikkei advancing over 2 percent due to a yen drop to its lowest since July 2024 against the dollar, benefitting export-driven shares. In contrast, markets in Mainland China and Hong Kong declined amid trade tensions following the U.S. decision to blacklist Tencent Holdings Ltd. and Contemporary Amperex Technology Co. Ltd. over alleged military links.
In the U.S., stocks broadly rose overnight, the dollar fell, and long-term Treasury yields edged higher, spurred by Foxconn's record fourth-quarter revenue and President-elect Trump's rebuff of reports regarding potential tariff revisions.
The tech-oriented Nasdaq Composite increased by 1.2 percent, while the S&P 500 rose 0.6 percent, with the narrower Dow settling slightly lower.
European stocks surged on Monday, marking the most significant rise in over a month following reports suggesting the incoming Trump administration might contemplate less aggressive tariffs. The pan-European STOXX 600 rose by 1 percent, the German DAX increased by 1.6 percent, France's CAC 40 jumped 2.2 percent, and the U.K.'s FTSE 100 rose by 0.3 percent.
The material has been provided by InstaForex Company -
www.instaforex.com
