By Dave Morris
European markets were broadly higher as the U.S.-Mexico deal to avert tariffs fueled optimism around global trade.
How did markets perform?
The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.56% inched up 0.2% to 378 following Friday’s increase of 0.9%.
The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.65% is 0.4% higher at 7,362.6. On Friday it climbed 1%.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.2252% fell 0.3% to $1.2697, giving back a 0.3% uptick from Friday.
France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.74% rose 0.2% to 5,373.4, adding to Friday’s gain of 1.6%.
Italy’s FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 +0.49% was flat at 20,349.2. It gained 0.9% Friday.
German markets are closed Monday.
What’s moving the markets?
U.S. President Donald Trump announced Saturday on Twitter that tariffs on Mexico due to come into effect Monday were suspended after the two countries reached an agreement in talks. Mexico will intervene more strongly to prevent migrants from transiting through the country to seek asylum in the U.S.
Neil Wilson, chief market analyst for Markets.com, said that thanks in part to the Mexico news, “Wall Street had its best week since November as weaker data cemented the market’s belief the Fed will cut rates—four cuts now more likely than one in 2019, according to the market. This looks overly optimistic.”
China data presented a mixed picture as customs trade exports increased 1.1% year over year, compared with an expected decline of 3.9%. The figures, however, were attributed by economists to exporters getting ahead of the imposition of tariff rises from the U.S.
Reuters reported that the European Central Bank is considering rate cuts and is watching the data for trade-related tensions. A key consideration, according to sources, is the strength of the euro, which rose following Thursday’s ECB meeting (at which it said it expected rates to stay in place until mid-2020) to $1.1347 versus the U.S. dollar.
Which stocks are active?
Thomas Cook Group PLC was 12.6% higher on reports that the beleaguered holiday travel company was in talks with China’s Fosun , which is its largest shareholder. The U.K. company’s shares are still down 83.6% in terms of their 52 week change.
Reuters reports that the price of Nissan agreeing to a deal among Fiat Chrysler Automobiles NV and Renault SA /zigman2/quotes/200919924/delayed FR:RNO +2.11% may be Renault reducing its stake in the Japanese auto maker. The deal, which was scotched last week after intervention by the French government, is expected to be revived. Renault shares increased 2.1%.
Plumbing and heating products company Ferguson PLC /zigman2/quotes/209006722/delayed UK:FERG +1.49% shares climbed 5.1% after third quarter fiscal year earnings showed revenue of $5.27 billion versus $4.97 billion in the same period the previous year. The company also announced it is starting a $500 million share buyback program over the next 12 months.