(Alliance News) – Stocks in London are set to open higher at the start of the week, with risk sentiment supported by the announcement of a US-EU trade agreement.
IG says futures indicate the FTSE 100 to open 49.4 points higher, 0.5%, at 9,169.71 on Monday. The index of London large-caps closed 18.06 points, 0.2% at 9,120.31 on Friday.
The CAC 40 in Paris is called up 1.1%, while the DAX 40 in Frankfurt is to open 1.2% higher.
Sterling faded to USD1.3430 early Monday, down from USD1.3437 at the time of the London equities close on Friday. The euro edged up to USD1.1741 from USD1.1737. Against the yen, the dollar rose to JPY147.77 from JPY147.69.
The yield on the 10-year US Treasury narrowed to 4.40% from 4.42%. The yield on the 30-year slimmed to 4.94% from 4.96%.
The EU and the US have reached an agreement to settle a trade dispute over tariff hikes, European Commission President Ursula von der Leyen and US President Donald Trump announced on Sunday.
According to Trump, the tariff rate on most imports will be 15%, including for the automotive industry.
The EU will agree to buy USD750 billion worth of energy from the US and invest an additional USD600 billion in the US, the US president said.
He described the energy agreement as an important component of the deal. Tariffs on steel and aluminium imports will remain at 50%.
The agreement aims to avoid even higher tariffs, after Trump had repeatedly threatened to impose high import levies on imports from the 27-member bloc for alleged trade imbalances and to pressure manufacturers to move production to the US.
Pepperstone analyst Michael Brown commented: “While such a levy remains sizeable, it is half the 30% tariff that had been threatened to go into place on Friday, and well below the 50% tariff threat that President Trump had made at the start of the month.
“Reports that the US and China, who embark on another round of trade talks in Stockholm today, are set to extend their current trade truce by a further 90 days. Not especially surprising on its own, but again confirmation that the two have no desire, or ability, to stomach super-high tariffs of the like seen early in Q2.”
In New York on Friday, the Dow Jones Industrial Average added 0.5%, the S&P 500 rose 0.4% and the Nasdaq Composite closed 0.2% higher.
In Asia on Monday, the Nikkei 225 index in Tokyo was down 1.0%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng Index in Hong Kong added 0.6%. The S&P/ASX 200 in Sydney was 0.4% higher.
Gold rose to USD3,339.71 an ounce early Monday, from USD3,329.51 at the time of the London equities close on Friday. Brent faded to USD67.99 a barrel from USD68.66.
By Eric Cunha, Alliance News news editor
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