The eurozone economy likely started the year less weakly than it ended 2024, according to business surveys, but the threat of higher U.S. tariffs still tempers hopes that lower borrowing costs will help fuel a pickup as the year advances.
Rising global borrowing costs show that investors “are already pricing in” the economic impact of Trump’s policies.
European shares fell to a one-week low on Monday amid a broader market selloff as global equities came under pressure following U.S. jobs data, which strengthened expectations that the Federal Reserve will approach interest rate cuts cautiously this year.
European shares slid on Monday as the technology sector joined the retreat in other markets after China's upgraded low-cost, low-power artificial intelligence (AI) model sparked worries about the profits of rivals and the need for costly tech.
As the greenback moved upward, European currencies found themselves at multi-year lows. The euro fell 0.4% to $1.0199 by 12:50 p.m. London time on Monday, its lowest value against the dollar since Aug. 2022. It was little changed on Tuesday morning.
European markets are heading for a positive open Wednesday as traders await the latest U.S. inflation data that will inform the Federal Reserve's decision-making on interest rate cuts.
The U.S. Federal Reserve announced on Friday it had withdrawn from a global body of central banks and regulators devoted to exploring ways to police climate risk in the financial system.