Trump eases markets by confirming there would be no military move to take Greenland
By James Sillars, business and economics reporter
We’ve seen something of a relief rally on financial markets following Donald Trump’s speech in Davos.
European stock markets were mostly on course for three days of losses over the US president’s threats to Greenland.
But he told his audience at the World Economic Forum there would be no military move to take the island.
It had an immediate impact.
The FTSE 100 overturned earlier losses and rose sharply before closing the day just 0.1% up at 10,138.
It was a similar story for the CAC 40 in Paris.
The German DAX, however, was perhaps a bit more sensitive to continued Trump noise over trade tariffs.
It was on course to end its trading session 0.5% down.
Germany, the manufacturing engine room of the EU’s economy, was also most exposed to news that the European Parliament had suspended work on ratifying the EU’s trade agreement with Trump last July.
The decision was taken in protest against his threats of additional tariffs unless a deal is reached over Greenland’s future.
Upside in US
Across the Atlantic, US stock markets are also reacting positively to the shift in the president’s tone on Greenland.
The dollar, the world’s reserve currency, remains under pressure though.
Nigel Green, CEO of global financial advisory firm deVere, said of the mood: “Markets rallied because the immediate fear of military escalation seems to have eased.
“But the speech in Davos was not conciliatory, it was highly aggressive. Trump repeatedly praised tariffs, defended their effectiveness, and presented them as a proven way to achieve national objectives.”
“Investors should focus on what he consistently endorsed, not simply on what he ruled out”, he concluded.
Perhaps that sentiment was evident in the so-called ‘safe haven’ gold price.
New record highs were set earlier in the day and it remained 2% up, above $4,850 per ounce, at the European close.
