Hello,

European markets opened higher this morning following the trade deal announcement between the United States (US) and the European Union (EU). A deal was struck following a one-hour meeting between President Trump and EU Commission President von der Leyen at Turnberry golf course in Scotland. Details are still to fully emerge but so far:

 

• The deal imposes 15% tariffs on most European exports to the US
• Key sectors such as Auto, Pharma, and semi-conductors are included
• However, reports this morning suggest Pharma may require further talks
• Steel and Aluminum tariffs will remain at 50%
• Von der Leyen committed to a $750bn EU spend on US Energy ($250bn a year for three years)
• The EU will also invest over $600bn in the US, with little detail on this yet
• Further individual ‘zero for zero’ announcements are expected in the coming days
• Von der Leyen also acknowledged that the EU’s $200bn annual trade surplus would have to be rebalanced
• So far, the reaction from European politicians and business leaders has been mixed
• There’s plenty of releases to move markets this week, including big Tech earnings
• It remains to be seen what impact the developments will have on key monetary policymakers

 

As always, if you wish to discuss anything in further detail, please do get in touch.