Stocks Rally and Euro Holds Steady Following US-EU Trade Deal Amid Key Global Economic Events

Global markets responded positively on Monday after the United States and the European Union reached a framework trade agreement that eased tensions and improved investor confidence. The deal imposes a 15% tariff on most EU goods, half the initially threatened rate, and includes provisions for forced U.S. energy and military equipment purchases, with no tariff retaliation from Europe. This move follows a similar trade agreement the U.S. recently secured with Japan, signaling a shift towards more predictable trade policies amid ongoing global uncertainties.

European stock futures surged over 1%, while U.S. futures also rose modestly, with the euro strengthening against major currencies like the dollar and yen. Market experts cautioned that much of the good news may already be priced in, but agreed the deal reduces the risk of a major trade conflict between two of the world’s largest economies. The agreement brings clarity to companies and alleviates a key source of global economic risk, supporting broader stability across international markets.

Investors now turn their attention to significant upcoming events this week, including monetary policy meetings by the Federal Reserve and the Bank of Japan, as well as the U.S. monthly employment report and earnings from major technology companies such as Apple, Microsoft, and Amazon. While both central banks are expected to hold rates steady, statements from officials will be closely watched for clues on future interest rate moves amid trade uncertainties and inflation concerns.

Commodity prices also reacted to the trade deal, with oil prices edging higher while gold prices declined to their lowest levels in nearly two weeks. Overall, the trade agreements with the EU and Japan, combined with the anticipated continuation of U.S.-China talks, suggest a period of managed diplomacy aimed at stabilizing the global economic outlook in the near term.

Source: Reuters