European and global markets opened cautiously on Tuesday as investors digest a mix of geopolitical developments and await clarity on stalled trade negotiations ahead of the July deadline for the reactivation of U.S. tariffs.
Markets have largely brushed off the impact of Moody’s downgrade of the U.S. credit rating, choosing instead to focus on the lack of concrete trade deals, particularly involving the United States. With President Donald Trump’s 90-day pause on reciprocal tariffs set to expire in early July, urgency is growing — but agreements remain elusive.
Global Trade Anxiety Mounts
Negotiators around the world are under pressure, but little progress has been reported. Japan’s chief trade envoy reaffirmed Tokyo’s stance demanding the elimination of U.S. tariffs, while the U.S. Treasury signaled no deal announcements are expected during this week’s G7 finance ministers' meeting in Canada.
This continued uncertainty has added to investor wariness. Though U.S. Treasury yields remain high, they have stabilized, and the U.S. dollar is holding near recent lows. Equity markets, meanwhile, appear modestly upbeat.
European Focus
European futures pointed to a positive open Tuesday following a flat session on Monday. However, with few major economic indicators scheduled — apart from Germany’s April producer prices and Eurozone consumer confidence for May — market sentiment is likely to remain sensitive to any trade-related news.
Asia: Easing Signals from China
In Asia, China cut its key lending rates for the first time since October and lowered major state bank deposit rates, signaling increased efforts to stimulate the economy. The Australian dollar remained steady after the Reserve Bank of Australia cut interest rates as expected.
Geopolitical Watch
Geopolitics may increasingly drive sentiment in the absence of solid economic data. On Monday, President Trump announced that Russia and Ukraine would begin immediate ceasefire negotiations, though Moscow cautioned that progress would be slow, and Trump declined to join EU allies in imposing further sanctions.
Key Market Drivers Today:
Investors remain caught between hope for diplomatic and trade breakthroughs and the persistent risks of inaction and policy surprises. As the tariff clock ticks, market volatility could rise unless more tangible progress emerges.
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The foreign ministers of Cambodia and Thailand have told Chinese Foreign Minister Wang Yi that they are willing to pursue a ceasefire, as tensions flared along parts of the two countries’ shared border.
Kazakh President Kassym-Jomart Tokayev’s first official visit to Japan marks a notable moment in relations between the two countries, reflecting a shared interest in deepening cooperation.
The United States has suspended the Diversity Visa Lottery programme, commonly known as the Green Card lottery, after a deadly shooting at Brown University.
The European Union is facing mounting political pressure over its ability to keep Russian sovereign assets frozen, as internal divisions, leadership changes and war fatigue reshape decision-making across the bloc.
Ukraine has welcomed the European Union’s decision to provide €90 billion in support over the next two years, calling it a vital lifeline even as the bloc failed to reach agreement on using frozen Russian assets to finance the aid.
European Union foreign policy chief Kaja Kallas has warned that attempts to reach a peace agreement in Ukraine are being undermined by Russia’s continued refusal to engage meaningfully in negotiations.
Petroleum products are being transported by rail from Azerbaijan to Armenia for the first time in decades. The move is hailed as a tangible breakthrough in efforts to normalise relations between the long-time rivals.
U.S. President Donald Trump delivered a wide-ranging address from the White House in which he sought to highlight what he described as his administration’s achievements while laying the groundwork for his plans for the year ahead and beyond, on Wednesday (18 December).
A rare pair of bright-green Nike “Grinch” sneakers worn and signed by the late NBA legend Kobe Bryant have gone on public display in Beverly Hills, ahead of an auction that could set a new record for sports memorabilia.
Warner Bros Discovery’s board rejected Paramount Skydance’s $108.4 billion hostile bid on Wednesday (17 December), citing insufficient financing guarantees.
Ford Motor Company said on Monday it will take a $19.5 billion writedown and scrap several electric vehicle (EV) models, marking a major retreat from its battery-powered ambitions amid declining EV demand and changes under the Trump administration.
Iran has rolled out changes to how fuel is priced at the pump. The move is aimed at managing demand without triggering public anger.
U.S. stock markets closed lower at the end of the week, as investors continued to rotate out of technology shares, putting pressure on major indices.
The U.S. Federal Reserve’s Federal Open Market Committee (FOMC) cut its benchmark interest rate by 25 basis points to a range of 3.50% to 3.75% following its two-day policy meeting, according to an official statement issued on Wednesday, 10 December.
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