European markets head for higher open; U.S.-China trade talks to take place in London
LONDON, ENGLAND - MARCH 24: A red London double decker bus and a UPS delivery van pass across Waterloo Bridge in front of St. Paul's Cathedral on March 24, 2025 in London, United Kingdom. (Photo by)
John Keeble | Getty Images News | Getty Images
Good morning from London! This is CNBC's live blog covering all the action in European financial markets as the new trading week begins.
Futures data from IG suggests London's FTSE will open 7 points higher at 8,836, Germany's DAX up 3 points at 24,296, France's CAC 40 up 5 points at 7,801 and Italy's FTSE MIB 13 points higher at 40,595.
Global market focus will be on U.S.-China trade talks which are expected to take place in London on Monday. President Donald Trump announced Friday that Treasury Secretary Scott Bessent and two other Trump administration officials will meet with their Chinese counterparts in the capital as efforts to negotiate a trade deal continue.
In other news, CNBC will be at London Tech Week this week with Nvidia CEO Jensen Huang set to deliver a keynote speech on Monday morning. There are no other major earnings or data releases due.
— Holly Ellyatt
Traders work on the floor at the New York Stock Exchange (NYSE), on the day of Circle Internet Group's IPO, in New York City, U.S., June 5, 2025.
Brendan McDermid | Reuters
U.S. equity futures were mostly flat overnight, with the S&P 500 trading near a record high and a busy week of potential market-moving news ahead.
U.S, inflation data is expected to be a key topic later in the week. The latest consumer price index is due out on Wednesday, followed by the producer price index on Friday. Traders will be looking for clues about how the current tariff rates are affecting the economy.
— Holly Ellyatt, Amala Balakrishner, Jesse Pound
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
43 minutes ago
- CNBC
China extends an olive branch to Western auto giants over rare earth shortage
China appears to have offered U.S. and European auto giants something of a reprieve after industry groups warned of increasing production threats over a rare earth shortage. China's Ministry of Commerce on Saturday said it was willing to establish a so-called "green channel" for eligible export license applications to expedite the approval process to European Union firms. A Ministry of Commerce spokesperson said Wang expressed hope that the EU would take "reciprocal steps" and adopt measures to promote compliant trade of high-tech products with China. The breakthrough comes after trade talks between Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Maros Sefcovic met in Paris, France last week. Beijing also granted rare earth licenses to suppliers of U.S. auto giants General Motors, Ford and Jeep-maker Stellantis, Reuters reported on Friday, citing unnamed sources. The report said China's Ministry of Commerce did not respond to a faxed request for comment. CNBC has contacted GM, Ford and Stellantis. China's Ministry of Commerce in early April imposed export restrictions on several rare earth elements and magnets widely used in the automotive, defense and energy sectors. The curbs were part of a response to U.S. President Donald Trump's tariff increase on Beijing's products. Some of the affected rare earth elements were critical components to the production of both combustion engines and electric vehicles. Maximilian Butek, an executive director and board member of the German Chamber of Commerce in China, said the weekend announcement was certainly good news for European businesses, but noted that it remains unclear whether the fast-track channel applies to large-scale firms or to sectors more broadly. "It is a huge bureaucratic monster that they've created and I'm not sure if they really can now speed up the process and give the licenses to those who need them," Butek told CNBC's "Europe Early Edition" on Monday. Europe's top automakers will welcome the diplomatic breakthrough, Butek said, while stressing the European bloc's need to improve supply chain diversification. "It all hit us quite by surprise that China is even willing to draw this card because this is a retaliation measurement towards the tariffs the U.S. implemented, right? And we, as European companies, we are now in the crossfire of this trade escalation, and this is really not where we want to be," Butek said. "It is not enough just to announce it but they have to show it," he added. China is the undisputed leader of the critical minerals supply chain, accounting for roughly 60% of the world's production of rare earth minerals and materials. U.S. officials have previously warned that this dominance poses a strategic challenge amid the pivot to more sustainable energy sources. Some analysts have compared the industry-wide squeeze on supplies of rare earth magnets to the global semiconductor crisis that disrupted automotive production during the coronavirus pandemic. Speaking to CNBC before China announced plans to expedite the approval process of rare earth exports to the EU, the European Automobile Manufacturers' Association (ACEA) said some of its members were at risk of production outages starting as soon as next month. The car lobby group, which represents the likes of Stellantis, Renault, Ferrari, Volkswagen and Volvo, said rare earth export licenses by China's Ministry of Commerce had been taking a "significant" amount of time to process since the April restrictions came into force. "Generally, global stocks of these magnets are quite low. And, given that China is the bulk global supplier, it has meant that, in the absence of these export licenses, those stocks have been depleting progressively since the start of April," Jonathan O'Riordan, international trade director at ACEA, told CNBC by phone. "We're gradually coming into a very, very critical moment whereby those stocks are now being exhausted, and we are potentially going to see production stoppages," he added. ACEA's warning followed a separate ominous update from the European Association of Automotive Suppliers. Last week, the group said that several auto supplier plants and production lines had already been shut down due to Beijing's recent export restrictions, with further outages expected as rare earth inventories deplete over the coming weeks. Japanese automaker Suzuki Motor, however, suspended production of its Swift car due to China's rare earth curbs, Reuters reported Thursday, citing two unnamed sources. A Suzuki Motor spokesperson did not respond to a request for comment when contacted by CNBC. Demand for rare earths and critical minerals is expected to grow exponentially in the coming years as the clean energy transition picks up pace.
CNBC
an hour ago
- CNBC
Why the U.S. tax bill's Section 899 could push European firms to list in the U.S.
The decision by U.K. fintech firm Wise to move its primary stock listing to the U.S. is the latest in a series of blows to the London market — and a new provision tucked inside a U.S. tax bill could make things even worse. Section 899 of President Donald Trump's spending bill, which passed the House of Representatives in May, threatens to penalize foreign-owned firms domiciled in countries with "unfair foreign taxes," and experts say it could accelerate the trend for European companies to hop the pond. The provision introduces retaliatory tax measures against corporations and other entities from countries that have levies such as the Digital Services Taxes and the OECD's global minimum tax rules. The list of affected nations would include most European Union members, the United Kingdom, Canada, Australia, and Switzerland, among others. For publicly traded companies, Section 899 imposes a new withholding tax on U.S.-sourced income for any foreign corporation that is more than 50% owned by non-U.S. entities. The tax would start at 5% and escalate by five percentage points annually to a maximum of 20%, on top of existing taxes, which vary by country and tax treaties. That could dent earnings for companies in the Stoxx Europe 600 index, for instance, by up to 2% in the first year, and as much as 5% over four years, according to Goldman Sachs analysts. How can European firms avoid Section 899? The Wall Street bank has identified a U.S. re-listing as one of many measures that companies could take if the bill becomes law. A listing in the U.S. would provide a direct path to increasing a company's base of American investors, according to Goldman. This would help companies push their non-U.S. ownership below the critical 50% threshold, taking them out of Section 899's scope. While there are many U.K. companies with high exposure to the U.S. with a majority-U.S. shareholder base, Goldman Sachs identified consumer credit rating firm Experian and Hikma Pharmaceuticals , among others, as two FTSE 100 companies with more than half their group revenues in the U.S. but falling below the 50% threshold for U.S. ownership. The Wall Street bank suggested that such companies could use a U.S. listing as one avenue to avoid taxes imposed by Section 899. Tax experts cautioned that to avoid the impact of Section 899, it would require significantly more work than simply relisting in the U.S. with an attempt to gain U.S. shareholders. "I'm not sure that listing alone would be sufficient," said a senior executive at a large European firm with extensive operations in the U.S., who asked not to be named as they were not authorized to comment on the issue. "The proposed language [in the bill] includes a vote or value test for U.S. ownership, including publicly traded companies, and seems to say that if a company [falls under Section 899 tax] for even one day then it is for the year." The executive also questioned whether companies will be able to identify beneficial owners — or the actual owners that control a business — "with any degree of confidence." That's because the tax bill includes "a look-through concept" — which means U.S. fund managers investing on behalf of foreign clients would not count toward the exemption requirements. "The monitoring [of the shareholder register] alone would be resource intensive," the executive added. Others point out that if European governments dropped what Trump calls their "unfair foreign tax" policies, their companies would automatically be exempted from 899. "Hill Republicans see section 899 not as a revenue-generating measure, but as a tool that gives the Treasury Department additional leverage in negotiations with other countries to encourage changes in behavior," Pat Brown, a tax expert at the consultancy PwC U.S., told CNBC. "Foreign-headquartered companies considering changes in their capital structure to reduce the impact of section 899 would need to consider that the government of their home country could, with the stroke of a pen, eliminate the need to consider section 899 as an issue," Brown added. Exacerbating a corporate-migration trend Goldman Sachs also highlighted that Section 899 could also act as a powerful incentive to a corporate migration trend that is already underway. For years, European and U.K. companies have felt disadvantaged by their home markets, a sentiment that has led to a steady flow of buyouts and re-listings elsewhere. Companies have repeatedly pointed to the valuation discount that European equities suffer compared to their U.S. peers to justify their decisions to move their listing to the U.S. Wise debuted on London's stock market in 2021 in a direct listing that valued the company at £8 billion ($10.84 billion) at the time. It is now valued at £11.07 billion, according to LSEG data. Since then, London has been mired in doubts over whether it can play host to major tech listings. The market is often criticized for lacking the depth of liquidity and industry expertise from investment analysts to accommodate such transactions. Doubts over London's stock market haven't been limited to tech, though. Last week, Glencore -backed metals investor Cobalt Holdings announced it was scrapping plans to go public in London. The IPO was expected to be the largest listing in the U.K. capital since early 2024. A spokesperson for London Stock Exchange Group (LSEG) told CNBC last week that London remains the top European exchange in terms of capital raised and the total market cap of the companies listed. They added that they had seen a "noticeable increase in interest from international companies in coming to London with many starting to prepare." — CNBC's Ryan Browne contributed reporting.
CNBC
an hour ago
- CNBC
Wood Mackenzie: Sustained risk still supporting oil prices
Sushant Gupta, Research Director, APAC Refining & Oils from Wood Mackenzie joins CNBC's Dan Murphy on Access Middle East to discuss the demand and direction of oil.
