European Shares Set To Rebound After Trump’s Greenland Reversal

European stocks look set to open on a buoyant note Thursday after U.S. President Donald Trump dropped plans to impose tariffs on several European countries over Greenland, adding a “framework” for a potential agreement with respect to the entire Arctic Region has been reached after talks with Nato.

Trump didn’t detail the parameters of the so-called “framework” but media reports said the framework involves mineral rights and the Golden Dome, Trump’s most ambitious missile-defense plan yet.

Greenland holds large quantities of rare earth elements, many of which are crucial for technologies including mobile phones and electric vehicles.

Nato’s secretary general said he had not discussed the key issue of Danish sovereignty over Greenland in his meeting with Trump.

Also, Denmark ruled out negotiations over ceding the semi-autonomous island to the U.S.

In economic news, trading later in the day may be impacted by reaction to typically closely watched readings on consumer price inflation, although the data for October and November may be seen as old news.

Asian stocks traded higher as Greenland-related geopolitical and trade tensions eased and long-dated Japanese debt rebounded from its losses, helping ease concerns over bond selloff.

Oil prices were marginally higher, and the U.S. dollar held on to overnight gains against major peers while Treasuries were steady after a $13 billion auction of 20-year bonds in the U.S. drew strong demand.

Gold was down 0.7 percent at $4,798 an ounce after surging to a new high in the previous session.

U.S. stocks ended sharply higher overnight as Trump reversed EU tariffs, reviving the TACO trade. The Dow, the S&P 500 and the tech-heavy Nasdaq Composite all rallied around 1.2 percent.

European stocks ended little changed on Wednesday as the European Union’s legislative body halted work on the final approval and implementation of the EU-U.S. trade deal until further notice, and U.S. President Trump insisted in his speech at the World Economic Forum in Davos, Switzerland, that he would not use force to acquire Greenland.

The pan European Stoxx 600 ended flat with a negative bias. The German DAX dipped 0.6 percent, while France’s CAC 40 finished marginally higher and the U.K.’s FTSE 100 added 0.1 percent.