European markets open higher amid hopes of Trump tariff respite; LVMH down 8%

The U.K. employment rate ticked 0.2 percentage points higher on the quarter to 75.1% between December 2024 and February 2025, the Office for National Statistics said in a labor market report published Tuesday.

In an initial estimate, the number of payrolled employees fell 0.3% month on month and 0.2% annually in March.

Average annual wage growth excluding bonuses came in at 5.9% in December to February, up from a rate of 5.8% in November to January. Wage growth including bonuses was 5.6%.

"These figures indicate that labor market activity was sluggish in the run-up to this month's substantial surge in tax and tariff costs, with unease over these twin threats limiting hiring plans," Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said in a note.

"This strong wage growth may be more a lagging indicator of wider labour market conditions than strengthening underlying inflation, as it takes time for employers to adjust pay settlements to changing circumstances."

Ashley Webb, U.K. economist at Capital Economics, said, "While the jobs market softened further, there were few signs of this feeding through to slower wage growth. But if the more uncertain backdrop from the recent U.S. tariffs chaos soon becomes a bigger drag on firms' hiring intentions, pay growth could start to fade more markedly."

— Jenni Reid

Luxury giant LVMH reported a 3% year-on-year fall in first-quarter sales in a trading update published shortly after the market close on Monday, missing consensus analyst expectations for slight growth.

The French group's wines and spirits business saw the sharpest revenue decline, down 9%, as it flagged weaker demand in the U.S. and China for cognac — the popular brandy variety that has been caught up in geopolitical tensions.

Fashion and leather goods sales slid 5%, while watch sales were flat.

LVMH share price.

Citi analysts Thomas Chauvet and Mahesh Mohankumar said in a Monday evening note that there was "not much to cheer for at the luxury bellwether," with sales "overall below the most conservative buyside expectations."

They added that it was difficult to foresee sequential revenue improvement in the second and third quarters for either LVMH or the luxury sector while U.S. and global economic uncertainty remained elevated.

Analysts at Jefferies meanwhile cut their target price on the stock to 510 euros ($578.62) from 670 euros.

The luxury sector, reliant on global supply chains and U.S. consumer demand, is facing a host of headwinds from U.S. President Donald Trump's volatile trade policy.

— Jenni Reid

Federal Reserve Governor Christopher Waller said Monday that inflation from Trump's tariffs likely will be "transitory," and indicated that interest rate reductions are still on the table.

In a speech delivered in St. Louis, the central bank official broke down tariffs into two scenarios, one in which they are higher and longer lasting and the other whether they are negotiated lower. In either case, Waller said rate cuts are likely to boost growth under the higher-tariff scenario or as "good news" reductions under the reduced level.

"I can hear the howls already that this must be a mistake given what happened in 2021 and 2022. But just because it didn't work out once does not mean you should never think that way again," Waller said of the "transitory" call.

— Jeff Cox

European markets are expected to open in mixed territory Tuesday.

The U.K.'s FTSE 100 index is expected to open 17 points higher at 8,136, Germany's DAX up 15 points at 20,922, France's CAC 40 points lower at 7,221 and Italy's FTSE MIB 135 points higher at 34,180, according to data from IG.

Earnings are set to come from Ericsson and Publicis on Tuesday, and data releases will include European industrial production figures, the latest U.K. unemployment data and the German ZEW survey of economic sentiment.

— Holly Ellyatt