European stocks are set to open higher Monday morning, amid a backdrop of renewed trade tensions.
Britain’s FTSE 100 was seen trading around 16 points higher at 7,681, while the German DAX was set to rise 31 points at 12,650, the French CAC 40 up 16 points at 5,498 and Italy’s FTSE MIB up 86 points at 21,620, according to online broker IG.
Across Asia, equity markets traded in the black as traders digested a decision by the People’s Bank of China to stabilize the yuan. The PBOC set the yuan mid-point at $6.8513, the weakest level since May 31, 2017. The Chinese currency traded just below the flatline at $6.8275 in early morning trade, London time.
Investors continued to monitor the U.S.-Sino trade spat. China’s official state-backed newspaper People’s Daily hit out at President Donald Trump on Monday amid an escalating war of protectionism between the two.
On Friday, China unleashed its latest salvo, saying it was preparing retaliatory measures against U.S. tariffs targeting $60 billion worth of U.S. goods with import duties.
America’s European allies will likely be nervous Monday as Washington gears up to re-impose sanctions on Iran that were overturned by an historic nuclear deal in 2015. The duties will affect Iranian products including automobiles and metals.
Meanwhile, in the latest Brexit-related development, U.K. Trade Secretary Liam Fox said over the weekend that the European Union’s stubbornness was increasing the chances of a no-deal withdrawal scenario. A no-deal Brexit would likely be a painful one for Britain and the EU’s economies, causing both parties to cut ties sharply and ruling out provisions to retain smooth trade between the two.
In corporate news, HSBC reported an earnings beat on Monday, with pre-tax profit up by 4.58 percent year-on-year to $10.712 billion in the first half of 2018. Italian lender UniCredit is due to report second-quarter results Monday.
On the data front, German industrial orders and PMI data are due to be released in the morning, along with British car sales and euro zone retail PMI figures.