European markets are set to open lower on Tuesday morning amid a political rift between Qatar and several other Arab countries and as investors take a cautious approach ahead of a general election in the U.K. and a European Central Bank (ECB) meeting.
The FTSE 100 is seen off by 1.3 points at 7,524, the CAC 40 is set to open 3 points lower at 5,300 and the DAX is expected to start off by 10 points at 12,801.
Oil prices dropped about 0.5 percent on Tuesday morning on concerns that a political rift in the Middle East could undermine the ongoing output cut led by OPEC countries. Countries such as Saudi Arabia, Egypt and the United Arab Emirates decided to cut ties with Qatar blaming it of supporting Islamist militants. Banking stocks could be a focus for Tuesday. Not only due to a monetary policy meeting by the ECB on Thursday, but also on reports of further problems in the Italian banking system.
According to Reuters, the central bank of San Marino, a microstate in Italy, plans to inject money into its ailing lenders which have 1.8 billion euros ($2 billion) in gross bad loans.
In the U.K., a former key advisor to David Cameron has called on the Conservative leader Theresa May to resign given her role in proceeding with police cuts when she led the Home Office. The comments come only a few days before U.K. voters choose a new Parliament.
In the corporate world, Lufthansa said Monday that demand for flights has grown this year, mainly from the U.S. and Asia. The German airline added that it will be looking at possible opportunities in Italy but it will not buy the stricken carrier Alitalia.
In terms of data, there will be the release of euro zone service PMIs (purchasing managers’ index) at 09:10 a.m. London time and retail sales at 10:00 a.m London time.