European markets seen under pressure ahead of US-EU meeting, fresh earnings
European markets are expected to open slightly lower Wednesday, with the topic of trade resurfacing as the head of the European Commission meets with President Donald Trump.
The FTSE 100 is seen slipping 8 points at 7,702, the French CAC 40 is set to open in the red by 8 points at 5,427 and the German DAX is expected to start off the trading day 27 points lower at 12,663, according to IG.
Having closed Tuesday’s trading day in the black, investor sentiment is expected to be somewhat cautious on Wednesday as the president of the European Commission, Jean-Claude Juncker, is set to meet with Trump at the White House in Washington.
During the gathering, the two leaders are expected to discuss a range of topics including establishing a stronger economic partnership and improving transatlantic trade relations — the latter will be watched closely following a recent trade spat between the two regions.
In June, the U.S. president threatened a 20 percent tariff on imported cars from the European Union (EU). Last week, the EU’s Trade Commissioner Cecilia Malmstrom said in Brussels that if the U.S. imposed these levies, it would be “very unfortunate.” In addition, the commissioner announced that the EU was preparing its own list of counter-measures.
Consequently, investors will be paying close attention to this gathering between Juncker and Trump, to see if tensions between the two regions ease or exacerbate.
Switching focus, earnings season continues to drive market sentiment. On Wednesday, Dassault Systemes, Deutsche Boerse, Iberdrola, Banco Santander, ITV and Vodafone are just a handful of businesses publishing results during the day. Before the bell, Deutsche Bank reported a net profit of 401 million euros ($468 million) during the course of its second quarter.
Other corporates to keep an eye on during market trade include Telecom Italia, Metro Bank and LVMH, all of whom issued financial updates after Tuesday’s market close.
In markets overseas, Asia markets were relatively mixed on Wednesday, as investors continued to keep abreast of news coming out of China. Earlier this week, Beijing announced that it had pledged to look into and undertake a more vigorous fiscal policy as the economy cools, Reuters reported.
Meanwhile, Wall Street’s Tuesday session saw big gains, after a better-than-expected earnings report from Google owner Alphabet. On Wednesday, Boeing, Coca-Cola, General Motors, UPS, Facebook and Ford are due to publish results.
No major economic data is set to be released.
Source: CNBC
