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The words "Tijuana, Mexico" are on the Mexican side of the US border, where migrants are waiting to be processed for asylum in the United States, in Tijuana, Mexico, yesterday Photograph: Eduardo Verdugo / AP
Hello and welcome to our slippery coverage of the global economy, financial markets, the eurozone and businesses.
This is happening in London this morning, but that does not diminish the optimism that prevails in the city and the global markets.
Shares surged in Asia today after the US withdrew from a trade war with Mexico.
Donald Trump's surprise means that Mexican imports will no longer be subject to tariffs of 5% as of today, which would have aggravated the trade dispute between America and other economies.
Trump's threat to use economic tariffs to tackle a political problem (US border migration) had worried the markets – what other problems could the US try to solve by threatening a trade war?
Under this agreement, Mexico will immediately expand its border program by returning asylum-seeker migrants to the United States pending a court ruling, deploying more officers to the United States. security to contain the flow of migrants heading to the United States and ending the illegal traffic statement said.
He is obviously relieved that an agreement has been reached, even though several of the "concessions" granted by Mexico to asylum seekers have apparently been agreed to several months ago.
As Elsa Lignos of RBC Capital Markets says:
The most important news of the weekend was Trump's Friday night tweet (and a joint US-MX joint statement). announcing an agreement that suspends Trump's tariff threat on Mexico for the moment.
In reading the details, Mexico has basically reaffirmed itself against existing promises (and maintained its own red line of denying safe third country status) – aka Trump blinked. The reaction in Asia has been positive.
Talking about blinking will not please the president – he wants more credit!
Donald J. Trump
(@RealDonaldTrump)If President Obama pbaded the agreements that I had reached, both at the border and for the economy, the corrupt media would be hailed as unbelievable and a national holiday would be declared immediately. With me, despite our record of economy and all that I have done, no credit!
Investors do not worry about the president's legacy. From Japan Nikkei The index jumped 1.2%, while a wave of shopping swept the Asian trading floors. From China CSI 300 The index rose 1%, as did Australia and South Korea.
The big question, however, is whether Trump is also ready to enter into an agreement with Beijing in order to win another victory before next year's re-election race.
Hope for a breakthrough at the G20 meeting could push European equities higher today. The FTSE 100 index should leap 40 points to 7368, adding to Friday's rally.
Hopes of an anticipated reduction in US interest rates following the weak US jobs report released on Friday also make optimistic traders (although, if we get a trade war deal, it will be less necessary to reduce borrowing costs to support the economy …)
IGSquawk
(@IGSquawk)European calls for opening:#FTSE 7367 + 0.47%#DAX 12113 + 0.56%#CAC 5385 + 0.39%#MIB 20469 + 0.53%#IBEX 9273 + 0.40%
Also coming today
The latest GDP figures will show the evolution of the UK economy in April, after the threat of a disorderly exit from the EU has been postponed until October. Economists fear a slight contraction (-0.1%), due to the deceleration of Brexit stocks.
We also get new data on UK trade.
L & # 39; s calendar
- 9.30 BST: British GDP for April
- 9:30 am: Industrial production for April
- 9:30 am UK trade balance for April
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