Europe’s major stock markets make modest gains, euro falls

Germany’s exporter-heavy DAX, France’s CAC 40, Italy’s FTSE MIB and Spain’s IBEX were all up between 0.4% and 0.8%

Europe’s major stock markets made modest gains while the euro fell in early trading on Monday as investors greeted a trade agreement between the United States and European Union with cautious relief.

The STOXX 600 opened 0.7% higher and the euro was down 0.3% against the dollar at the start of what looks set to be a pivotal week in U.S. President Donald Trump’s global trade war.

The framework deal, which European Commission President Ursula von der Leyen described as the best the bloc could get, will impose a 15% import tariff on most EU goods and see the EU spend $600 billion on U.S. investments while opening up some important parts of its market.

“The deal is better than the 30%-50% tariff rates threatened over the last couple of months, although it is probably as bad as the universal tariff rates being discussed late last year,” ING analyst Chris Turner said.

MUFG FX strategist Derek Halpenny said the EU deal was ultimately, “good news from a financial markets perspective as it reduces uncertainty further still ahead of 1st August, which is now looking like an insignificant date.”

Germany’s exporter-heavy DAX, France’s CAC 40, Italy’s FTSE MIB and Spain’s IBEX were all up between 0.4% and 0.8% after the first hour of trading, while S&P 500 and Nasdaq futures , pointed to fresh record highs on Wall Street when it resumes.

The euro had initially strengthened when Asian markets reopened, but it steadily dropped into the red as the dollar nudged higher across the board.

Euro area government bond yields, which are a proxy for borrowing costs, also edged down.

Germany’s 10-year yield , the euro area’s benchmark, was 0.5 basis points lower at 2.71%, after rising more than 10 basis points at the end of last week when the European Central Bank curbed talk of imminent rate cuts.