BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may open on a buoyant note Thursday after U.S. President Donald Trump announced a 90-day pause on tariffs for all countries, except China.
Countries previously subjected to higher reciprocal levies will now be taxed at the 10 percent baseline rate during this period.
The decision came hours after China announced an 84 percent tariff on the U.S. and the European Union approved its first retaliation measures in response to Trump's tariffs.
White House advisors reportedly claimed the flip flop was always the strategy, suggesting that the past week of massive tariffs that triggered huge market losses was all for show.
However, media reports suggest that a fast sell-off in U.S. Treasury bonds played an important role in Trump's decision to delay the tariffs.
Goldman Sachs Group Inc. economists rescinded their forecast for a U.S. recession after the tariffs pause announcement.
Meanwhile, taxes on Chinese imports have been further jacked up from 104 percent to 125 percent in an effort to isolate Beijing on the issue.
In a post on his social media account, Trump said that China has a lack of respect to the world's markets and that at some point, hopefully in the near future, the country will realize that the days of ripping off the USA, and other Countries, is no longer sustainable or acceptable.
Asian markets followed Wall Street higher, with benchmark indexes in Australia, South Korea and Japan climbing 5-8 percent as fears of a U.S. recession and stagflation eased.
Chinese and Hong Kong markets traded higher despite China's consumer price inflation and producer price inflation falling more than expected in March, highlighting demand woes.
A gauge of the dollar slipped for a third day while yields on the 10-year U.S. Treasuries edged lower.
Oil prices fell more than 1 percent in Asian trade after rebounding over 3 percent on Wednesday.
Gold rose over 1 percent above $3,100 per ounce after posting its biggest one-day gain in 18 months amid rising U.S.-China tensions.
In economic releases, U.S. consumer price inflation and weekly jobless claims data will be the spotlight later today.
U.S. stocks soared to one of their best days in history on Wednesday following the tariff pause announcement.
The tech-heavy Nasdaq Composite jumped 12.2 percent, the S&P 500 spiked 9.5 percent and the Dow surged 7.9 percent.
European stocks slumped on Wednesday, reversing course after having snapped a four-session losing streak the previous day.
The pan European STOXX 600 plunged 3.5 percent. The German DAX lost 3 percent, France's CAC 40 tumbled 3.3 percent and the U.K.'s FTSE 100 declined 2.9 percent.
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