European Markets Poised for Gains Amid US Tariff Reprieve and ECB Policy Focus

European stocks are trending toward a positive open on Thursday, buoyed by news that the Trump administration has granted a one-month exemption on tariffs for vehicles imported from Canada and Mexico. While the move provides a temporary window for negotiations, the broader 25% duties on these nations remain active, and additional levies are scheduled to begin in April. The relief in the auto sector comes as markets prepare for a pivotal day of central bank activity. Both the European Central Bank and the Central Bank of Turkey are scheduled to announce interest rate decisions, which will likely dictate the near-term trajectory of regional currencies and equities. Simultaneously, EU leaders are convening in Brussels for a special summit to coordinate defense and continued support for Ukraine. In the fixed-income space, a global bond selloff has intensified. Japanese benchmark yields have reached their highest levels in over a decade, following a sharp rise in German bund yields. This volatility is largely attributed to Germany's proposed increase in spending on national defense and infrastructure. In the US, markets closed higher with the Nasdaq gaining 1.5% and the S&P 500 rising 1.1%. Investors are now shifting focus to retail earnings from Costco, Kroger, Macy's, and Gap to gauge the impact of trade tensions on consumer spending, as well as Friday's critical non-farm payrolls report. Asian markets saw gains led by China, where Alibaba unveiled a new AI model designed to compete with DeepSeek using significantly less data. Meanwhile, oil prices have recovered slightly after a four-session decline, though growth concerns and potential OPEC+ supply increases continue to weigh on the commodity.