Europe midday: Stocks give back small gains after Beijing announces counter tariffs

Stocks across the Continent were trading on a mixed note heading into the weekend, knocked lower by China's announcement of retaliatory trade tariffs against the US even as investors waited on a key speech from the head of the US central bank.

Shortly after noon, Beijing announced that it would impose tariffs on $75.0bn-worth of US exports, mainly soybeans, cars and oil, with some of the new levies set to go into effect on 1 September and others on 15 December, mimicking the timetable for Washington's own new set of tariffs.

Significantly however, Bloomberg reported that a Chinese trade delegation was still planning to visit Washington in September.

Against that backdrop, as of 1435 BST the benchmark Stoxx 600 was edging higher by 0.07% to 374.54, alongside a dip of 0.11% to 11,734.48 for the German Dax and of -0.11% to 5,382.41 on the Cac-40.

The FTSE Mibtel on the other hand was down by 0.64% to 20,680.83 after the country's President, Sergio Mattarella, gave the Five Star and Democratic parties until Wednesday to try and form a new coalition government or otherwise face elections in October.

But there was an unexpected twist to the ongoing political manoeuvres, with League leader Matteo Salvini having offered Five Star leader, Luigi di Maio, the premiership in return for a reconciliation between their two parties.

Beijing's announcement, while expected, stole some of the spotlight from Federal Reserve chief, Jerome Powell, who was set to deliver a widely anticipated speech at the Fed's central banking symposium in Jackson Hole, Wyoming, at 1500 BST.

Investors wanted to know whether the central bank would cut rates again in September, whether by 25 or 50 basis points, and if further rate cuts might follow.

Judging by remarks from five rate-setters in the run-up to Jackson Hole, additional rate reductions were possible, but there was a clear bias towards not moving too quickly; although one of those policymakers expected there to be a "robust" debate around a possible 50 point cut.

In the background meanwhile, G7 leaders were meeting in the southern French resort town of Biarritz.