A look at the day ahead in European and global markets from

Vidya Ranganathan.

Donald Trump and the European markets have come full circle

again.

The euro and European stocks tumbled on Friday when the U.S.

president decided abruptly he would impose 50% tariffs on

imports from the European Union since trade talks were not

moving quickly enough.

By Sunday, Trump had delayed the tariffs again after

European Commission President Ursula von der Leyen asked for

time, and markets are back up this morning. The

euro is at its highest since April 30 against the dollar

.

Von der Leyen said in a post on X on Sunday that she had a

"good" phone call with Trump.

Markets may have recovered, but not sentiment. The weekend's

back-and-forth only served to remind investors how chaotic,

impulsive and unpredictable Trump can be, even when dealing with

his biggest trading partners. Germany was the EU's biggest

exporter to the U.S. last year.

In early April, Trump set a 90-day window for trade talks

between the EU and the U.S., which was to end on July 9.

Trump's latest trade tantrum came just hours after European

Central Bank policymaker Joachim Nagel, who heads Germany's

Bundesbank, said markets were close to nuclear meltdown after

Trump's April 2 reciprocal tariff announcements, and that had

helped to discipline the U.S. administration. Apparently not.

The slow exit of investors from that chaos - and from their

outsized exposures to the world's biggest economy and stock

markets - continues.

European equity exchange-traded funds have pulled in 34

billion euros ($38.6 billion) of cash over the year to May 16,

four times the 8.2 billion euros put into U.S. equity funds,

Morningstar data shows.

By comparison, in 2024 net flows into U.S. equity funds in

Europe had dominated by a ratio of more than 8:1 over locally

focused products.

Market holidays in the United States and Britain should keep

trading relatively muted on Monday.

It's also relatively quiet on the data front, with the

notable releases this week including the Fed's targeted

inflation metric, Personal Consumption Expenditures, for April,

due on May 30. That could paint a clearer picture of the impact

of U.S. tariffs.

April was a volatile month in the markets after Trump's

tariff onslaught on April 2, but recent consumer and producer

prices data has not flashed inflationary warning signs just yet.

The euro zone's biggest economies - France and Germany -

report consumer prices data on Tuesday and Friday, and bloc-wide

figures follow the week after.

Key developments that could influence markets on Monday:

SPEAKERS: ECB President Christine Lagarde, Riksbank

executive board meeting

COMPANIES: NTS Ackermans & Van Haaren NV Annual Shareholders

Meeting, Leonardo SpA Annual Shareholders Meeting

DEBT AUCTIONS: Reopening of French 3-month, 6-month and

1-year government debt auctions

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