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EU stocks head south ahead of the G7 summit
On Friday, stock markets of Western European countries were suppressed due to the bearish mood amid soaring disagreement between America and other G7 participants before the summit in Canada.
The summit in Quebec, Canada is expected to burst out on Friday. The key issue on its agenda will be foreign trade. Previously, the American government rolled out tariffs on the supply of aluminum and steel from six partner countries for the G7 that they pledged to take retaliatory measures.
By the way, the day before, French leader Emmanuelle Macron told that six countries without America together turn out to be a larger market than the US. He also stressed that without serious concessions from America he won’t sign the traditional joint statement of the G7. Responding to Macron’s statement, Donald Trump criticized the European Union and Canada for generating trade barriers against America and it’s quite unfair to US farmers, companies and employees.
Previously, the market quite calmly perceived the soaring tension in world trade. As a result, Trump's hawkish stance was considered to be another tactical trick in the talks. However, it becomes obvious that many G7 participants are reluctant to play this game and they’re ready to come up with symmetrical answers.
The index of the key businesses of the Stoxx Europe 600 region dipped by 0.66% reaching 383.39.
Meanwhile, the British FTSE 100 went down 0.79%, while the French CAC 40 lost 0.43%. In addition to this, the German DAX dipped 1.31%, the Italian FTSE MIB lost 1.79% and the Spanish IBEX 35 edged down 1.05%.
The equities of Deutsche Bank headed south by 0.6%, while Commerzbank papers lost 2.3%.
Capitalization of Lloyds dived by 1.2% after the financial institution decided to have the remaining 3.3% of Aberdeen's Standard Life insurer sold for about 344 million pounds.
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Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.