Trump Confirms Meeting with Xi, Reviving European Markets Today

UPDATE: European markets are reacting swiftly this morning as US President Donald Trump confirms a pivotal meeting with China President Xi Jinping in just two weeks. This announcement has ignited renewed optimism in risk assets following a heavy slump in stocks yesterday.

Throughout the morning, market sentiment appeared bleak, heavily influenced by rising US-China trade tensions. However, Trump’s calm demeanor during an interview with Fox Business, where he remarked, “we’ll be fine with China,” has led to a significant market rebound. His assertion that high tariffs are “unsustainable” is also bolstering investor confidence.

S&P 500 futures, which initially plummeted by approximately 1.3%, are now recovering, with losses trimmed to just 0.3%. Similarly, 10-year US Treasury yields have bounced back from a low of 3.94% to around 3.98%, indicating a shift in investor sentiment.

In the currency markets, the US dollar is regaining strength, particularly against the Japanese yen. The USD/JPY pair rebounded from a low of 149.40 to climb back above 150.00, although it is still down 0.2% on the day. The EUR/USD is trading flat at 1.1690, while the GBP/USD holds steady around 1.3437. The AUD/USD has also recovered slightly, moving from 0.6450 to 0.6485.

However, European stocks are struggling to capitalize on this renewed optimism. The DAX remains down by over 1.6%, as investors grapple with the fallout from Wall Street’s losses. Meanwhile, France’s CAC 40 index has managed to pare losses, currently down just 0.2%.

In commodities, gold experienced a volatile day, initially surging to $4,370 before profit-taking saw it drop to $4,292, marking a 0.8% decline. This shift reflects a broader recovery in risk appetite, as investors pivot away from safe havens.

In the cryptocurrency space, Bitcoin has hit fresh four-month lows, briefly dipping below $104,000. This decline poses technical risks, as it threatens to break below its 200-day moving average for the first time since April, prompting caution among traders.

The implications of Trump’s meeting with Xi are significant, as it could pave the way for easing trade tensions and restoring investor confidence. Market watchers will be closely monitoring developments leading up to this crucial meeting, as the performance of global markets hangs in the balance.

Stay tuned for further updates as the situation evolves and investor reactions unfold throughout the trading day.