Euro zone investor morale bounces

BERLIN, July 09 (Reuters): Investor morale in the euro zone rose in July to end a five-month run of declines, a survey showed on Monday.

But research group Sentix said the spectre of escalating trade tensions with the United States risked depressing sentiment again.

Sentix's index for the euro zone rose to 12.1 from 9.3 in June.

The Reuters consensus forecast was for a fall to 8.2.

"This development is unlikely to herald the start of a new upswing," Sentix said in a research note.

"If US President Trump now targets the European car industry, the trade dispute could lead to more than a slowdown in economic sentiment," it added.

Trump threatened last month to impose a 20-per cent import tariff on all EU-assembled vehicles, which could upend the industry's current business model for selling cars in the US.

Trump also hit the European Union, Canada and Mexico with tariffs of 25 per cent on steel and 10 per cent on aluminium at the start of June.

Trump administration's imposition of tariffs ended exemptions that had been in place since March.

The EU and Canada responded with their own levies on US goods.

China has also hit US goods with tariffs in response to Trump's decision to impose levies on Chinese imports, spooking German manufacturers who rely on the world's two largest economies for growth.