Global equities are strengthening on Monday as traders are put at ease by positive comments from several big names from the White House. major European and U.S. indices are mostly up by a percent, after a strong positive day in Asia where both the Shanghai and Hang Seng indices rose by more than 2 percent.
President Trump over the weekend stated he does not expect a recession whilst trade advisor Peter Navarro threw cold water on the yield curve inversion signal that sent investors into a panic last week saying that the curve is actually flat given the absence of a big spread between the long and short term treasuries.
Commerce Secretary Wilbur Ross was reported as saying the U.S. would delay restrictions Huawei, adding fire to Monday’s optimism in the financial markets. This is viewed as a positive opening to the week for the ongoing U.S./China trade talks, although a deal is not yet on the horizon.
Germany is said to be planning to launch a fiscal stimulus program aimed at supporting its declining economy by boosting consumer spending and preventing wide-scale unemployment. On Sunday, Germany’s Finance Minister hinted at a 50bn euros of additional spending that would be triggered by an economic crisis. The Bundesbank warned that Germany is on the edge of recession given negative economic data and weak corporate earnings of recent times.
In the UK, new PM Boris Johnson remains confident that the EU will agree to a better deal but also insisted the UK is ready for a no-deal Brexit at the end of October. Mr. Johnson is scheduled to have talks with the German Chancellor and the French President later this week.