Trade Tensions and Economic Concerns Dominate EMEA Markets

European stock futures are mixed, with trade issues in focus. The US economy's size means it takes a large share of Europe's exports, making it difficult for Europe to replace lost demand. Fading prospects of Fed rate cuts could be supportive for the US dollar. Oil rises amid seasonal demand hopes, while gold edges higher on possible position adjustments. Copper edges lower due to Trump's Aug. 1 deadline on copper shipments to the US. Iron ore strengthens in Asian trade.

European stock futures are trading mixed on Monday, with trade tensions and the US economy's outlook taking center stage. The US economy's size means it takes a significant share of Europe's exports, making it challenging for Europe to replace lost demand. Ongoing concerns about President Donald Trump's trade war may weigh on markets, with Trump threatening to impose 30 percent tariffs on European goods starting August 1 [1].

The European Union has prepared a retaliatory tariff package worth €72 billion (£63 billion) targeting American goods, including cars, aircraft, bourbon whiskey, and agricultural produce [2]. This comes as the EU has been working on a trade deal with a baseline reciprocal 10 percent levy, but the latest threat of 30 percent tariffs has put that agreement in jeopardy.

Meanwhile, the US economy is expected to pick up steam this week, with major companies like Citigroup (C), JPMorgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), and Netflix (NFLX) due to report their quarterly results. The absence of major US economic data today may keep some traders on the sidelines, but the release of consumer and producer prices, retail sales, and industrial production reports in the coming days could provide further insights into the US economic outlook [1].

Fading prospects of Fed rate cuts could be supportive for the US dollar, as investors may anticipate a more accommodative monetary policy from the European Central Bank. Oil prices are rising amid seasonal demand hopes, while gold edges higher on possible position adjustments. Copper prices are edging lower due to Trump's August 1 deadline on copper shipments to the US [1].

Iron ore prices are strengthening in Asian trade, with China's imports of the commodity surging in June. The country's overall exports jumped 5.8 percent year-on-year, while imports grew 1.1 percent from a year earlier, indicating a robust demand for raw materials [1].

In summary, European stock futures are mixed, with trade issues and the US economic outlook driving market sentiment. The US economy's size and Europe's reliance on US exports make the trade war a significant concern for European markets. The absence of major US economic data today may keep some traders cautious, but the upcoming data releases could provide further insights into the US economic outlook.

References:

[1] https://www.rttnews.com/3553096/futures-pointing-to-extended-pullback-on-wall-street.aspx
[2] https://www.express.co.uk/news/world/2082248/eu-usa-trade-tariffs-donald-trump