28th Feb 2025 06:53
(Alliance News) - Stocks in Europe are called to open lower and stocks in Asia struggled on US tariff nerves, ahead of the release of a key US inflationary gauge in the afternoon.
IG says futures indicate the FTSE 100 to open 48.9 points lower, 0.6%, at 8,707.31 on Friday. The index of London large-caps closed up 24.75 points, 0.3%, at 8,756.21 on Thursday.
The CAC 40 is called down 0.8% and the DAX 40 is to open 1.1% lower.
"The trade war drumbeat is getting louder. In the last 24 hours, Trump has gone full throttle on tariffs, doubling down on a 25% levy against the European Union, reaffirming the March 4 launch of duties on Canada and Mexico (scrapping earlier April 2 ambiguity), and slapping an additional 10% tax on Chinese imports.
"The market had been clinging to hopes of a softer stance, but what they got was a stark reminder: tariff escalation is the default setting, and Washington isn't backing down," SPI Asset Management analyst Stephen Innes commented.
Sterling fell to USD1.2577 on Friday morning, from USD1.2626 at the time of the London equities close on Thursday. The euro faded to USD1.0383 from USD1.0407. Against the yen, the dollar edged up to JPY150.00 from JPY149.97.
A barrel of Brent declined to USD73.03 from USD73.76. An ounce of gold traded at USD2,864.71, falling from USD2,873.26.
The US and Britain will end up with a "great" trade agreement, President Donald Trump said Thursday during a joint press conference with British Prime Minister Keir Starmer.
"We're going to have a great trade agreement, one way or the other," Trump told reporters in Washington. "We're going to end up with a very good trade agreement for both countries, and we're working on that as we speak."
China on Friday vowed to take "all necessary countermeasures" after US President Donald Trump said he would impose an additional 10% tariff on Chinese imports.
Trump's latest move is due to take effect on Tuesday alongside sweeping 25% levies on Canadian and Mexican imports, intensifying a brewing trade war between the world's two largest economies.
The 10% tariff on Chinese imports will come on top of an existing levy of the same rate imposed by Trump on China earlier this month.
In response to Trump's allegations that Beijing is contributing to a deadly fentanyl crisis in the US – his justification for the tariffs – a spokesperson for China's commerce ministry said in a statement Friday that Washington was "shifting the blame".
"China is one of the countries with the strictest and most thorough anti-narcotics policy in the world," the statement read.
In China, the Shanghai Composite traded 1.9% lower on Friday, while the Hang Seng Index in Hong Kong tumbled 3.3%. Tokyo's Nikkei 225 slumped 2.9% and the S&P/ASX 200 in Sydney shed 1.2%.
Friday's UK corporate calendar has full-year results from engineer IMI, educational publisher Pearson, online property portal Rightmove and British Airways parent IAG.
Friday's global economic calendar has German consumer price index data at 1300 GMT, before a US personal consumption expenditures reading at 1330 GMT.
Rabobank analysts commented: "Economists who map the CPI and PPI reports into core PCE inflation estimate it rose 0.28% month-on-month, thanks to softness in healthcare and financial services. Favourable base effects should then bring annual core inflation down to 2.6% from 2.8%.
"But before you get too excited about 'rate cuts', Fed officials remain wary. Progress on disinflation has clearly slowed, in spite of real spending appearing to be contracting slightly despite rising real incomes."
By Eric Cunha, Alliance News news editor
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