European stocks rebound thanks to postponement of US tariffs to China

European stocks
traced initial losses on Tuesday, after the United States decided to postpone the imposition of tariffs on some Chinese goods, which improved the vaunted investor confidence.

* The Government of President Donald Trump will postpone new tariffs of 10% on imports of certain Chinese products, such as laptops and mobile phones, which were due to start at the beginning of next month, announced the Office of the United States Trade Representative.

* The decision supported a return of investors to risky assets after a cocktail of negative data that put pressure on the markets in recent sessions.

* The actions of raw materials, automotive and technology sectors were some of the most advanced in Europe and helped the pan-European STOXX 600 index close 0.5%, erasing the previous losses in the session that reached 0 , 8%.

* “What we are seeing with this announcement is a clearly positive development,” said Ken Odeluga, a market analyst at City Index. “This is undoubtedly a relief for the markets, because (…) this announcement shows the willingness of both parties to compromise.”

* However, Odeluga doubts that Tuesday’s progress will last, given the recent market volatility caused by fears of the recession, worsening tension in Hong Kong and the collapse of markets in Argentina.

* The German DAX index, highly dependent on exports, advanced 0.6% after the news from Washington, bouncing after a previous data showed a drop in the confidence of German investors. On Wednesday they will analyze in detail the report of economic growth of the second quarter, to see if Europe’s largest economy is heading for recession.

* The relief of commercial tensions also boosted crude oil prices, placing energy actions among the leaders of the day in the STOXX 600.


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