Shares opened higher everywhere in Europe on Thursday with all sectors up on the Stoxx-600 index, extending yesterday’s gain. The appetite for higher-risk assets remains high and is even offsetting last week’s sell-off due to the coronavirus and its short to mid-term impact on China’s economy, as well as its commitments regarding the freshly signed phase-one trade deal with the US. This optimism has been given another boost on Thursday after Chinese officials confirmed another tariff cut by 50% on $75 billion of US goods, effective this month (Feb 14), which lifts further uncertainty surrounding international trade.
Photo by Mathias Konrath.
Meanwhile in Europe, Christine Lagarde said this morning downside risks for the Eurozone were reducing and growth was in-line with the ECB’s expectations. However, the ECB also warned the low interest rate and low inflation environment has significantly reduced the Central Bank’s scope to ease monetary policy in the case of an economic downturn, which could be threatening in the medium term. Further volatility is to be expected on share markets prior to tomorrow’s German Industrial Production data as well as the US job report for January where analysts and economists expect solid data.
