ICEC

European stocks to open higher as Italy budget tensions rumble on

European stocks are expected to open higher Tuesday, despite ongoing friction between Italy and the European Union (EU) over the former’s 2019 budget.

Britain’s FTSE 100 was set to rise 7 points to 7,243; Germany’s DAX to move 36 points higher to 11,975; France’s CAC to edge up 17 points to 5,313; and Italy’s FTSE MIB to increase 63 points to 19,844.

Over in Asia, equities slipped, following a choppy session on Wall Street. U.S. markets were little changed Monday on the back of a sharp rise in bond yields. On Tuesday, the yield on the U.S. Treasury yield reached 3.252 percent, its highest since May 2011, while the U.S. 30-year yield hit a four-year high at 3.439 percent.

Meanwhile, the International Monetary Fund cut its global economic growth outlook for this year and the next, citing trade uncertainties including the new NAFTA agreement, Brexit and the battle of tariffs between the U.S. and China.

In geopolitical news, U.S. Secretary of State Mike Pompeo has called on Saudi Arabia to thoroughly investigate the disappearance of journalist Jamal Khashoggi, a critic of the Saudi regime, after visiting the Saudi consulate in Istanbul.

Pompeo’s intervention comes after Turkish President Recep Tayyip Erdogan said Riyadh ought to prove that Khashoggi had in fact left the building at all. President Donald Trump has also said he is “concerned” about the situation.

Back in Europe, traders are closely monitoring the political situation in Italy, where tensions are growing between Rome and Brussels over the new coalition government’s first budget and deficit targets. Italy’s populists are targeting a deficit of 2.4 percent of gross domestic product (GDP) next year, and say they will commit to a drop to 2.1 percent in 2020 and 1.8 percent in 2021.

European Affairs Minister Paolo Savona on Monday sought to assuage worries of a standoff between Italy and the EU, saying he was confident the government would reach an agreement with the European Commission.

Meanwhile, in data, British consumer spending slowed in September, surveys conducted by the British Retail Consortium and Barclaycard showed on Tuesday. And German balance of trade numbers are due today at 6 a.m. London time.

Source: CNBC

Comments
Loading...