Following reports that the US was considering throwing China a bone in the form of a lift of some trade tariffs, European stock markets rallied. Investors are looking for any cause for optimism at present and the possibility of a trade war breakthrough is clearly reason enough. The FTSE 100 jumped, as did Germany’s DAX and France’s CAC. Washington and Beijing have until the end of February to thrash out a deal and this latest news looks like a significant step in the right direction.
Similarly to the UK, there are no major economic data releases from the eurozone today, but tomorrow we will see the ZEW economic sentiment indices from Germany and the eurozone. It is fair to say that recent readings have been extremely disappointing and it will be hoped there is some improvement, however small. On Wednesday, we will see the flash consumer confidence reading for January, while Thursday sees a raft of purchasing managers’ index reading from Germany and the eurozone. Together, they will give us a real sense of how 2019 has kicked off for the eurozone’s economy.
The European Central Bank will announce its interest rate decision where rates are expected to be held, but the accompanying press conference will be particularly interesting this time, as a deluge of data suggests the economy is really struggling at present.