European stocks experienced a decline, while precious metals reached new highs on Wednesday as investors awaited US President Donald Trump’s speech at the World Economic Forum in Davos. The speech comes amid Trump’s push to acquire Greenland, which has sparked tensions with European countries.
Markets have been impacted this week by Trump’s threat to impose tariffs of up to 25% on several European nations, including France, Germany, Britain, and Denmark, in response to their opposition to his Greenland plans. The European Union has warned of retaliation, with EU chief Ursula von der Leyen stating that the bloc would be “unflinching” in its response to Trump’s threats.
US Treasury chief Scott Bessent has urged Europeans to avoid “reflexive anger” and engage in dialogue with Trump to hear his arguments. The US president’s speech at Davos is highly anticipated, with investors watching for any indication of his next move on the Greenland issue.
Analysts warn that if Trump persists with his plans to take control of Greenland and sidelines his closest allies, risk sentiment could decline further. The concerns surrounding the Greenland crisis have driven precious metals to new peaks, as investors seek safe-haven assets in times of turmoil.
Global markets have experienced a downturn this week, with Wall Street’s main indexes plummeting on Tuesday after a long weekend. However, Wall Street futures indicated a potential recovery on Wednesday. In Asia, Tokyo’s stock market fell, while Hong Kong and Shanghai saw gains.
The Japanese bond market also experienced volatility, with yields surging after Prime Minister Sanae Takaichi pledged to cut taxes if she wins a fresh mandate in the upcoming election. However, Finance Minister Satsuki Katayama called for calm, highlighting the country’s rising tax revenues and low reliance on debt issuance.
In company news, British luxury fashion label Burberry saw a 5% increase in shares after reporting a rise in sales, driven by improved demand from China. The company’s performance is a rare bright spot in an otherwise turbulent market.
As of 1100 GMT, key figures showed the London FTSE 100 down 0.1% at 10,113.83 points, while the Paris CAC 40 and Frankfurt DAX experienced declines of 0.1% and 0.8%, respectively. The Tokyo Nikkei 225 fell 0.4%, while the Hong Kong Hang Seng Index and Shanghai Composite saw gains of 0.4% and 0.1%, respectively.
The euro and pound sterling experienced declines against the US dollar, with the euro trading at $1.1709 and the pound at $1.3403. Oil prices also fell, with West Texas Intermediate down 0.5% at $60.04 per barrel and Brent North Sea Crude down 0.5% at $64.57 per barrel. As the situation continues to unfold, investors will be closely watching Trump’s next move and its potential impact on global markets.
