LIVE MARKETS-Europe to bat away U.S. tariffs, weaker currency to help

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

EUROPE TO BAT AWAY U.S. TARIFFS, WEAKER CURRENCY TO HELP

Another day, another story on tariffs.

This time, U.S. President Trump has tasked his economics team with devising plans for reciprocal tariffs on every country that taxes U.S. imports, starting from April.

While that may look bad for Europe on the surface, Barclays is sanguine about the possible impact, especially as the delayed implementation opens the door for negotiation.

"The actual hit to growth is likely manageable and largely offset by weaker EURUSD," Barclays says.

If implemented in a reciprocal fashion, Barclays believes the impact will be further lessened.

The staples, autos and chemicals sectors exhibit the widest tariff gaps, Barclays notes, so they would be most exposed to reciprocal tariffs, but these sectors have underperformed since the U.S. election.

"Some of the earnings downside is arguably priced in already," Barclays notes.

And while the threats keep mounting, equities in Europe continue to hit record peaks.

The pan-continental STOXX 600 .STOXX is set for its eighth straight positive week, its longest stretch in 11 months.

"Arguably the biggest driver thus far of the ytd relief rally is burgeoning confidence - warranted or not - that tariff risk is more a negotiation tool than a real threat," Barclays says.

"And that Europe might therefore be more immune than feared."

(Samuel Indyk)

FRIDAY'S OTHER LIVE MARKETS POSTS:

IT'S HARD TO SHORT FRENCH BONDS CLICK HERE

STOXX DOWN, LUXURY SECTOR BOOSTED BY HERMES CLICK HERE

EUROPE BEFORE THE BELL: FUTURES MIXED, MARKETS SET FOR WEEKLY RISE CLICK HERE

TARIFF WORRIES WANE, HERMES EARNINGS AWAIT CLICK HERE