Global markets start the day cautiously: China tariff truce boosts Asia, Europe eyes results and confidence

Asian stocks mixed, European futures point to positive opening. Oil and gold fall while the dollar remains firm.

New York / London / Tokyo – Global financial markets began trading Tuesday, May 13, 2025, with a general sense of caution, albeit with regional nuances. Key news, China's reduction of tariffs on US products, injected temporary optimism into some Asian stock markets. Meanwhile, futures in Europe suggest a mostly higher opening, with investors eyeing a slew of corporate earnings and the crucial ZEW investor confidence index.

The early morning trading session was marked by the news that China has reduced tariffs on US goods to 10% as part of a 90-day temporary agreement aimed at de-escalating trade tensions between the world's two largest economies. This measure had a direct impact on Asia: Japan's TOPIX index advanced 1.1% and China's Shanghai Composite rose 0.18%. However, not everything was positive in the region; South Korea's KOSPI closed virtually flat, and, more notably, Hong Kong's Hang Seng fell 1.5% at the time of the report, demonstrating that the tariff truce is viewed with some skepticism regarding its durability and structural reach.

On the Old Continent, futures for the major stock indices pointed to a moderately positive opening. The German DAX was expected to rise 0.4%, the French CAC 40 0.16%, and the Euro Stoxx 50 0.23%. The British FTSE, meanwhile, showed a slight downward trend.

The attention of European investors will be focused on several fronts:

* Corporate Earnings: Quarterly reports from key companies such as Sea Limited, JD.com, Under Armour, and the pharmaceutical company Grifols are expected. Their figures and forecasts could significantly impact their respective sectors.

* Investor Confidence: The release of the ZEW investor confidence index for Germany and the Eurozone will be a crucial indicator of economic sentiment in the region. A strong reading could consolidate optimism.

* Geopolitics: Although with low expectations, markets will closely monitor the meeting between Russia and Ukraine in Istanbul, where a possible ceasefire is being negotiated.

One encouraging piece of data was the significant drop in the VIX volatility index, which stood at 18.39 points, a 16% decline. This suggests a weakening risk aversion in the short term, possibly influenced by the trade easing and the strong performance of Wall Street, where the S&P 500 had risen 3.2% and the Nasdaq 4.3% in the previous session.

In the commodities market, Brent crude oil experienced a slight 0.1% drop, trading at around $64.90 per barrel. Meanwhile, gold continued its downward trend, reaching $3,250 per ounce, a reaction that could be linked to the lower perception of global risk following the tariff truce.

In the foreign exchange market, the euro/dollar exchange rate remained stable at 1.1105. The benchmark interest rate (Yield) on the 10-year US bond showed a slight increase, reaching 4.46%.

"The MSCI World Index rose 2.2% (the previous day)… Today we continue with the results season, with Sea Limited, JD.com, and Under Armour, among others, reporting their figures." – Self Bank Blog

While the tariff truce between Washington and Beijing offers some relief, analysts note that structural problems in the bilateral trade relationship remain unresolved, limiting the scope for optimism. The 90-day duration of the current agreement leaves the door open to a possible resumption of trade hostilities.

Furthermore, President Trump's recent statements, calling the European Union "nastier than China" on trade matters, and the general uncertainty about future U.S. tariff policies, could be tempering enthusiasm in European markets. Europe is a key trading partner for the U.S., and any escalation of transatlantic tensions would have a direct negative impact on the continent's exporters.

Summary Table: Global Market Opening (May 13, 2025, Early CT)

| Region | Main Index | Change (%) (Approx.) | Key Influential Factor | |—|—|—|—|| Asia | TOPIX (Japan) | +1.1% | China-US tariff truce | | Asia | KOSPI (South Korea) | Flat | Global mixed | | Asia | Hang Seng (Hong Kong) | -1.5% | Persistent caution, doubts about China-US deal |

| Asia | Shanghai Comp. (China) | +0.18% | China-US tariff truce | | Europe (Fut.) | DAX (Germany) | +0.4% | Earnings expectations, ZEW; positive contagion Asia/US || Europe (Fut.) | CAC 40 (France) | +0.16% | Earnings expectations, ZEW | | Europe (Fut.) | FTSE (UK) | Negative Light | Local caution | | Commodities | Brent Oil | -0.1% ($64.9/barrel) | Global demand, inventories || Commodities | Gold | Down ($3,250/oz) | Lower risk aversion || Currencies | Euro/Dollar | Stable (1.1105) | Central bank expectations, macro data |

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