European markets rally amid talks

EUROPEAN equities rallied yesterday after Donald Trump dialled back on his threat to hit the EU with 50% tariffs by delaying their implementation to July.

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Just as markets were showing signs of settling following their bond-fuelled selloff last week, the US president hurled his latest grenade across the pond on Friday by levelling 50% levies at the bloc from June 1, saying talks were “going nowhere”.

He also said he would hit smartphone makers with 25% tolls if they did not make their handsets in the US.

Wall Street's three main indexes and most European markets dumped into the red Friday.

However, Trump provided some relief by saying the EU tariffs would not be put in place until July 9 following a “very nice call” with its boss Ursula von der Leyen, adding that officials will “rapidly get together and see if we can work something out”.

Von der Leyen vowed to move “swiftly” to reach a deal.

Paris and Frankfurt jumped more than one percent in the first few minutes of trade, while London was closed for a holiday.

US futures also rallied but Asia struggled.

“The stock market seems to dance to Trump’s tune: first a threat, then a pullback, quickly followed by a rebound as speculative investors anticipate a concession from the US president,” said Jochen Stanzl, chief market analyst at CMC Markets.