Despite the possibility of a fresh trade spat between the United States and China, European equities began lower on Tuesday, erasing the week’s generally upbeat trend.
Following the prospect of a new round of tariff hikes by U.S. President Donald Trump to “financially offset” new export restrictions that China had placed on rare earth minerals, markets have been on edge.
About 70% of the world’s supply of rare earth minerals, which are essential for high-tech sectors including electronics, automotive, and military, comes from China.
Trump said that trade ties with China “will all be great” in a Truth Social post on Sunday, perhaps hinting that he would not carry out his threat.
China’s stock market may be displaying symptoms of strain after a recent run on stimulus promises, as fresh trade concerns pose a danger to dampen investor confidence.
Ahead of its third-quarter results report, which is scheduled for early November, the oil major BP revised its outlook on Tuesday. The business said that it anticipated up to $500 million in “post-tax adjustment items due to asset impairments” in the third quarter of its fiscal year.
In other news, Tuesday morning’s announcement of U.K. employment data caused the British pound to drop 0.4% vs the euro and the US dollar. In the three months leading up to August, the unemployment rate increased to an estimated 4.8%, according to data from the nation’s Office for National Statistics. This was just higher than the 4.7% that analysts had projected in a Reuters survey.
According to Indeed’s senior economist Jack Kennedy, the UK labor market seems to be in a rut.
Kennedy said in an email that “it has settling into a pattern in which hiring appetite is modest but job losses are restricted — a harsh climate for people out of work and new entrants – but those who have a job are more inclined to stay there.” “Even if wage pressures are progressively decreasing, they are still high, and the next rate drop by the Bank of England is not expected until 2026.”
News from the annual meetings of the World Bank and IMF in Washington will likely be of interest to investors. Tuesday marks the publication of the IMF’s most recent World Economic Outlook report.
The meetings bring together academics, civil society, the corporate sector, central bankers, and ministers of finance and development to address global topics such as economic development, poverty alleviation, and the global economy.