European shares trim losses on earnings hopes amid trade fears
Stock markets struggled on Monday as fears of a further escalation in the U.S.-China trade conflict offset prospects for more bumper corporate earnings, and broader market sentiment remained fragile.
European shares initially followed their Asian counterparts lower - hurt by weak European bank earnings and trade fears - but a falling euro boosted exporters and helped halt the slide.
The strength in German shares came despite the biggest plunge in German industrial orders in nearly 18 months.
The autos sector, which has been a proxy for investors' worries over higher trade tariffs, led the gains.
European companies including Glencore, Lufthansa, UniCredit, Adidas and Commerzbank report this week.
E-Minis for the S&P 500 were little moved, slipping in and out of positive territory.
"In his latest Twitter tirades and his latest appearances in front of his supporters the U.S. president has indicated something akin to a 'strategy' behind his trade war policy," Commerzbank said. "The trade war will remain in place regardless of how much the Chinese cave in."
China proposed tariffs on $60 billion worth of U.S. goods on Friday and a senior Chinese diplomat cast doubt on prospects of talks to resolve the row.
Trump has said his strategy of placing steep tariffs on Chinese imports is "working far better than anyone ever anticipated", citing losses in China's stock market. He predicted the U.S. market could "go up dramatically" once trade deals were renegotiated.
FX MARKETS FEARFUL
Worries about trade were evident in currency markets, with the dollar edging towards a one-year high.
The People's Bank of China's intervention last week to impose a reserve requirement on foreign exchange forward contracts had the desired impact of halting the slide in the yuan - in offshore markets, it fell 0.1 percent to 6.8574 , well away from the 6.91 weak point plumbed last week.
Traders saw Friday's move as an attempt by Chinese authorities to show they wanted stability, or even conciliation; others said the intervention would not prevent further yuan selling with Washington and Beijing still at loggerheads.
U.S. jobs data on Friday, while weaker than expected, underlined that the world's largest economy is growing robustly, supporting synchronized global growth that had underpinned investor sentiment before the recent eruption of the trade dispute.
Markets are increasingly nervous about whether U.S. growth may have peaked, with concerns about rising tariffs exacerbating those fears.
The euro slipped 0.3 percent to $1.15300, a six-week low, while the stronger dollar sent the Swiss franc down half a percent.
"The trade war concerns are supporting the dollar and there is a bit of a risk-off tone in the markets," said Manuel Oliveri, currency strategist at Credit Agricole.
The British pound hit 11-month lows after the UK trade minister warned Britain was headed for a no-deal Brexit.
Oil prices gained, helped by an unexpected decline in Saudi crude production. Brent crude futures rose more than 1 percent to $74.01, while U.S. crude oil futures traded as much as 1.5 percent higher at $69.58 a barrel.
Gold weakened on the back of a firmer dollar and was last down 0.4 percent at $1,208.77.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)