FX.co ★ European Shares Seen Opening Up After Trump's Tariff Delay

European markets are poised for a potentially positive start on Tuesday following a move by U.S. President Donald Trump to postpone imposing 25 percent import tariffs on Canada and Mexico for the next 30 days. This decision temporarily mitigates the risk of an imminent trade war.

However, the uncertainty persists as it is unclear how China will react to the newly implemented 10 percent tariffs, effective today. On Monday, Federal Reserve officials Susan Collins (Boston) and Raphael Bostic (Atlanta) cautioned that the Trump administration's tariff strategy carries inflation risks, adding another layer of uncertainty regarding the Federal Reserve's interest rate trajectory.

Meanwhile, Asian markets experienced a recovery, while the Canadian dollar, Mexican peso, and euro remained stable against the U.S. dollar following the temporary tariff relief. China's yuan exhibited volatile movements in offshore trading. The dollar index endured losses, bolstering gold prices to a historic peak. Conversely, oil prices dipped nearly 1 percent as fears of supply disruptions subsided.

Today's economic calendar is relatively sparse, with U.S. reports on job openings and factory orders expected to attract some interest as the session progresses.

In terms of corporate earnings, major firms including Merck, PayPal, PepsiCo, Pfizer, and Spotify are set to release their quarterly results before the U.S. market opens.

U.S. stock markets clawed back from earlier significant declines but still closed notably lower on Monday. This followed President Trump's announcement of a 30-day pause on tariffs against Mexico after reaching a border security agreement to curb the flow of fentanyl and illegal migration into the United States. Additionally, investors processed data showing U.S. manufacturing growth in January, marking the first increase in over two years.

On Wall Street, the technology-laden Nasdaq Composite fell by 1.2 percent, the S&P 500 decreased by 0.8 percent, and the Dow Jones Industrial Average slipped by 0.3 percent. After market hours, Canadian Prime Minister Justin Trudeau confirmed that the proposed U.S. tariffs will be postponed for at least 30 days.

In Europe, stocks experienced a significant downturn on Monday following President Trump's enactment of tariffs on imports from Canada, Mexico, and China, coupled with a stern warning that tariffs on the European Union are inevitable. The pan-European STOXX 600 index fell by 0.9 percent, with Germany's DAX declining by 1.4 percent, France's CAC 40 decreasing by 1.2 percent, and the UK's FTSE 100 losing 1 percent.