European markets breathed a sigh of relief after the on-again, off-again global trade war inspired by President Donald Trump was put on pause. The US and China will temporarily lower tariffs on each other’s products, ratcheting down trade tensions between the world’s two biggest economies. 

“We are in agreement that neither side wants to decouple,” Treasury Secretary Scott Bessent told us in a television interview following a weekend of intense talks in Geneva. The temporary measure gives both sides three months to work towards a lasting agreement. Equities across the world surged on the news.

But even as the truce pushed investors back into American assets, making it look like Trump’s “Liberation Day” shock never happened, some observers remain less sanguine. While sentiment towards the US stock market is improving, some strategists say it’s too early for investors to sound the all-clear. Tariffs are still impinging on major investment decisions, like SoftBank’s venture with OpenAI. Others suggest a more serious psychological toll. An awful lot is now riding on the Trump administration never having meant a word it was saying, writes John Authers for Bloomberg Opinion.

Keep up with all the market reaction by following our live ticker  --Jonathan Tirone

What You Need to Know Today

Kurdish separatists agreed to lay down their arms after a 40-year fight for autonomy against Turkey. The historic step by the PKK would strengthen Ankara’s aspirations to become a regional powerhouse and help to rebuild Syria’s war-ravaged economy. Turkish President Recep Tayyip Erdogan has been working on a bargain with the Kurds for months. Learn more about the conflict’s background and history by reading our explainer.

Euro currency bulls are still riding high. Some of the world’s biggest investors say the European Union’s common currency is still just at the beginning of its rally. It’s a dramatic turnaround that has some strategists seeing a structural change in currency markets. Underscoring the changing mood music, Greece’s finance minister told us his nation wants to repay bailout loans 10 years early. Once the poster child of the euro crisis, Greece is now running a budget surplus. 

European drugmakers tanked along with the rest of the pharmaceutical industry after Trump vowed to cut US prescription costs. The president said he’s planning an executive order mandating that Americans pay comparable prices to people in other countries. The announcement meant that AstraZeneca lost its crown as the UK’s most valuable listed company. Novo Nordisk and Sanofi also fell. The US is big business because Americans spend more on prescription drugs than any other country in the world. 

Saudi Arabia expects a Trump dividend after helping to lower oil prices. Crown Prince Mohammed bin Salman is preparing to welcome Trump back with a grand display of pageantry as the two look to monetize their relationship. But the transaction might not go the way Trump had envisaged. With a slump in oil prices of the kingdom’s own making, the Saudi financial dynamic has shifted: the big spender abroad is in urgent need of money at home.

A poster promoting Vision 2030 in Riyadh, in 2022 Photographer: TAMIR KALIFA/NYTNS

European borrowing costs will fall more than expected this year, according to economists we surveyed. The European Central Bank is now expected to lower interest rates below 2% as inflation undershoots heading into 2026. There’s a similar picture in Switzerland, where rates are seen falling to zero after less than three years in positive territory.

There’s a $1 trillion opportunity in helping people adapt to climate change. That was the conclusion of a new London Stock Exchange study, which found that much being generated in total revenue from 2,100 companies providing products and services helping to adjust to life on a hotter planet. Underscoring the rising value of novel climate technologies, Towerbrook Capital Partners is preparing to sell an Austrian bio-refinery for $500 million that’s helping farmers adapt to drought. 

Still mongering over fish, or is something deeper at play heading into the summit between the EU and UK? Britain and the EU are still trying to resolve disagreements over fisheries just a week before Prime Minister Keir Starmer plans to announce a major reset in post-Brexit relations. While the focus on what swims below still waters perpetually triggers emotions on both sides of the channel, other topics on the agenda could potentially be more consequential. They include migration, trade and defence. Even barring a deal over fishing rights at next week’s meeting in London, change is on the way for consumers who enjoy eating the fruit of the sea. 

Eating With the Ecosystem is trying to introduce ‘climate winners’ such as blue crab to restaurants in the New England region. Photographer: PIERO CRUCIATTI/AFP

What You’ll Need to Know Tomorrow

For Your Commute

Yoël Zaoui, the co-founder of boutique investment bank Zaoui & Co., has relocated to Milan as the London-based firm seeks to strengthen its ties with Italian and French corporates. The 64-year-old veteran banker is the latest financier to leave the UK as British lawmakers are curbing perks for living there. We’re told that Zaoui—a French and British national—has opted to move to Italy where some of the firm’s key clients including Assicurazioni Generali SpA are based.

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