Investing.com - European equity indices traded firmly higher Monday, buoyed by positive noise emerging from the trade talks between China and the U.S. over the weekend, raising hopes that a prolonged trade war between the two largest economies in the world can be avoided.
The DAX index in Germany closed 0.3% higher, the CAC 40 in France gained 1.4% and the FTSE 100 in the U.K. rose 0.6%.
China/U.S. trade deal boosts sentiment
The White House on Sunday announced that a trade deal with China had been reached, after U.S. officials spent the weekend negotiating with their Chinese counterparts.
Chinese officials also flagged welcome progress in the talks, and said that they will make a joint announcement with the U.S. later on Monday.
A potential deal would mark a major de-escalation in a bitter trade war between the world’s biggest economies, after they slapped trade tariffs of over 100% on each other in April.
Few details of this agreement have been announced, and it was notable that neither team mentioned actual tariff levels at all over the weekend. That said, the weekend passing without heated words, at least suggests some progress.
Helping the mood was the fragile ceasefire holding between India and Pakistan, while Ukrainian President Volodymyr Zelenskiy said he was ready to meet Vladimir Putin in Turkey on Thursday for talks.
ECB rate cut in June?
The economic data slate is largely empty in Europe on Monday, but the week sees growth data for the first quarter in the eurozone as a whole as well as inflation data for the key European countries.
The European Central Bank has cut interest rates seven times in the past year as inflation has been rapidly retreating, and policymakers have already started to lay the groundwork for another cut in early June.
Financial markets see a 90% chance of a rate cut in June and see another cut or two in subsequent months.
UniCredit reports record net profit
There are fewer quarterly results scheduled for this week, after the heavy issuance of the last couple of weeks.
Still, Italian lender UniCredit (BIT:CRDI) posted a record net profit of €2.8 billion in the first quarter of 2025, up 8.3% from a year earlier, as higher fees and trading income offset a decline in net interest income.
German steelmaker Salzgitter (ETR:SZGG) posted weaker-than-expected first-quarter results on Monday, as sluggish economic conditions across Europe—particularly in Germany—dragged on performance in its steel production and processing divisions.
Crude rises on trade optimism
Oil prices rose Monday, building on last week’s sharp gains as the announcement of a China-U.S. trade deal raised hope that the world’s two largest crude users may be moving toward a resolution of their dispute.
At 11:43 ET, Brent futures climbed 2% to $65.19 a barrel, and U.S. West Texas Intermediate crude futures rose 2.1% to $62.32 a barrel.
Both contracts rose by more than 4% last week on optimism over a potential de-escalation in Trump’s tariff agenda.