06.02.202505:42:00UTC+00European Shares To Open On Firm Note As Trade War Fears Ease

European markets are projected to open on an optimistic note this Thursday, buoyed by a reduction in trade war concerns. Adding to the positive sentiment, U.S. Treasury Secretary Scott Bessent clarified that President Donald Trump is not explicitly urging the Federal Reserve to lower interest rates.

Bessent suggested that adjustments in energy prices, coupled with the implementation of the administration's tax-cut extensions and further economic deregulation, would allow interest rates and the dollar to stabilize naturally.

In other developments, after Trump's controversial suggestion regarding control of the Gaza Strip sparked international backlash, the White House confirmed that the President's comments did not imply a military intervention, assuring that U.S. troops would not be involved.

Reports indicate that Trump may reveal his strategy to resolve the prolonged three-year conflict in Ukraine at the upcoming Munich Security Conference in Germany next week.

The U.S. economic schedule is relatively light today, with key focus on the weekly jobless claims report and preliminary data on labor productivity and expenses for the fourth quarter of 2024.

In Europe, data releases on German factory orders and Eurozone retail sales are anticipated. The Bank of England is also set to announce its interest rate decision, with expectations leaning towards the year's first rate cut.

U.S. stock futures have seen modest gains as investors await Amazon's earnings report and the government's nonfarm payrolls data for further guidance.

Asian markets were predominantly higher following the U.S. Postal Service's reversal of its ban on inbound packages from China and Hong Kong.

The U.S. dollar weakened, hitting an eight-week low against the yen and approaching a one-month low against the British pound, as concerns over inflation receded.

Gold stabilized near its record high, and oil prices made slight gains, recovering from a 2% drop seen in the previous trading session.

In the U.S., stock markets completed a mixed session slightly higher last night. The dollar declined, and Treasury yields fell to their lowest since mid-December. This came after tech giants such as Alphabet and Advanced Micro Devices reported lackluster earnings and the economic data painted a mixed picture.

Reports disclosed that private sector employment rose in January, with wages continuing to grow annually, although U.S. service sector activity eased during the month, and the trade deficit widened due to record-high imports in December.

The Dow Jones increased by 0.7%, the S&P 500 nudged up by 0.4%, and the tech-centric Nasdaq Composite climbed 0.2%.

European stocks advanced for a second consecutive day on Wednesday, supported by favorable earnings outcomes from banks and pharmaceutical companies, which helped alleviate pressure over potential U.S. trade tariffs.

The pan-European STOXX 600 index rose by 0.5%, the German DAX grew by 0.4%, and the U.K.'s FTSE 100 climbed by 0.6%, while France's CAC 40 declined by 0.2%.