Money Flow & EU Premarket: European Markets Head for Negative Start after New Tariff Threats

U.S. President Donald Trump has fulfilled his tariff threats against Mexico, Canada, and China, prompting swift retaliatory measures from the latter two. This does not bode well for hopes that Europe might escape tariffs, which could weigh on regional sentiment. Trump previously stated that tariffs on the European Union “will definitely happen” and called for a 25% tax on cars and “other things.” Stoxx 50 futures fell by 0.7%, erasing some of Monday’s gains driven by the defense sector after regional leaders pledged to increase military spending. In this context, Trump signaled that a minerals agreement with Ukraine is still on the table, which could keep hopes for a truce high enough to offset some of the negativity surrounding trade. The euro remains unchanged against the dollar at $1.0490.

Asian indices are mostly in the red, though the declines were more moderate by the end of the session. The MSCI Asia Pacific index fell by 0.3%, with the automotive and semiconductor sectors weighing on the benchmark. U.S. index futures are trading with slight gains after closing Monday’s session lower, while U.S. bond yields remain stable. The dollar index is nearly unchanged. The yen has strengthened by 0.1% against the dollar after Japanese Prime Minister Shigeru Ishiba denied that Tokyo is attempting to weaken its currency. The Australian dollar is the weakest currency among the G-10, falling by 0.3%. Oil prices continue to decline after OPEC+ signaled plans to resume halted production