Global markets slide on Monday

Global markets retreated on Monday as fresh US tariff threats against Europe rattled investors, weakened the dollar, and drove demand for safe havens.

Asian stocks slipped after US President Donald Trump said Washington could impose additional tariffs on imports from eight European countries unless the US was allowed to buy Greenland. Japan’s Nikkei fell 0.8 per cent, while MSCI’s Asia Pacific index outside Japan edged down 0.1 per cent. Thin trading due to a US market holiday weighed on sentiment, pushing S&P 500 futures down 0.8 per cent and Nasdaq futures 1.1 per cent.

European futures also declined, with EUROSTOXX 50 and DAX futures each down 1.1 per cent and FTSE futures off 0.4 per cent. Trump said a 10 per cent levy would apply from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain, rising to 25 per cent from June 1 if no agreement was reached.

European Union states condemned the move, while France proposed a broad response that could include reviving suspended tariffs on €93 billion of US imports and deploying the bloc’s Anti-Coercion Instrument, potentially targeting US services and investments. Deutsche Bank warned that Europe’s $8 trillion holdings of US assets could amplify market disruption if capital flows reverse.

In currencies, the dollar weakened against traditional safe havens, slipping 0.4 per cent versus the Swiss franc and 0.2 per cent against the yen. The euro rose 0.3 per cent to $1.1628, while sterling gained to $1.3389.

Attribution: Reuters