---
title: "Europe rallies after the 'good' phone call"
description: "European markets rebounded after U.S. President Trump delayed imposing 50% tariffs on EU imports following a positive phone call with European Commission President Ursula von der Leyen. The euro rose "
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/241784273.md"
published_at: "2025-05-26T04:30:00.000Z"
---

# Europe rallies after the 'good' phone call

> European markets rebounded after U.S. President Trump delayed imposing 50% tariffs on EU imports following a positive phone call with European Commission President Ursula von der Leyen. The euro rose to its highest level since April 30 against the dollar. Despite the market recovery, investor sentiment remains cautious due to Trump's unpredictable trade policies. European equity ETFs have attracted significant investment, contrasting with U.S. equity funds. Upcoming economic data releases, including U.S. inflation metrics and consumer prices from France and Germany, may further influence market dynamics.

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 STXEc1, EUR= are back up this morning. The euro is at its highest since April 30 against the dollar EUR=EBS.

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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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.