European stocks opened higher Monday as investor sentiment improved on hopes for new trade deals ahead of the July 9 tariff deadline set by U.S. President Donald Trump. Germany’s DAX climbed 0.5%, France’s CAC 40 rose 0.2%, and the U.K.’s FTSE 100 gained 0.1% by 07:05 GMT.
The upbeat tone followed gains in Asia-Pacific markets after the U.S. finalized a trade agreement with China. Additional optimism came from Canada’s decision to repeal its Digital Services Tax, easing tensions with the U.S. and paving the way for resumed trade and security talks. Finance Minister François-Philippe Champagne confirmed legislation will be introduced to formally withdraw the tax, which had tarobtained global tech giants.
In Europe, Bloomberg reported that European Commission President Ursula von der Leyen expressed confidence in reaching a deal with Washington before tariffs take effect. Without an agreement, the U.S. plans to impose 50% duties on nearly all EU imports, with the EU ready to retaliate.
Economic data reinforced the necessary to avoid a trade conflict. Germany’s retail sales fell 1.6% in May, underscoring weak consumer spconcludeing in Europe’s largest economy. Meanwhile, China’s factory activity contracted at a slower rate in June, though demand remains soft amid ongoing U.S. tariffs. Japan also reported weaker-than-expected factory output, largely due to declining auto exports.
Investors are also watching upcoming German and Italian inflation data, following a drop in eurozone inflation to 1.9% in May. Despite a rate cut in June, ECB President Christine Lagarde hinted that further easing may be limited.
On the corporate front, Polar Capital reported a 27% jump in annual operating profit, supported by a 17% rise in assets under management. Crude oil prices dipped slightly ahead of the July 6 OPEC+ meeting, where another output hike is expected.
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