European markets to open lower on Brexit stalemate as investors await ECB meeting
European markets were seen lower Tuesday morning after U.K. Prime Minister Boris Johnson lost a second bid to hold an early election but reiterated his pledge to leave the EU on October 31.
Investors also have one eye on an impending meeting of the European Central Bank (ECB), with markets hopeful of a monetary stimulus package later this week.
The FTSE 100 was seen around 12 points lower at 7,224, the DAX was expected to fall around 20 points to 12,206 and the CAC 40 was set to open around 8 points down at 5,581, according to IG data.
Johnson vowed Tuesday that he would not request an extension to Brexit, hours after a new law came into force demanding that he delay Britain’s departure from the EU until January 2020 unless he can secure a new Withdrawal Agreement with the bloc.
Lawmakers early Tuesday morning rejected Johnson’s second bid to hold a snap general election. British Parliament is now suspended until October 14 with the Brexit outcome no clearer.
Investor focus is also attuned to an impending ECB decision, with markets hoping for a fresh stimulus package to be announced Thursday in a bid to boost the beleaguered euro zone economy.
Stocks in Asia were mixed Tuesday afternoon as Chinese producer prices fell to their worst year-on-year contraction in three years, causing mainland Chinese shares to lead losses.
Back in Europe, Reuters reported that Germany is considering setting a “shadow budget” to circumvent strict national debt rules and facilitate new debt to invest in the country’s ailing economy. German bund yields hit a one month high following the report.
In corporate news, Deutsche Bank CFO James von Moltke said on Monday that the German lender’s overhaul was not impacting its investment banking revenue as negatively as anticipated, adding that he was “quite encouraged” by developments to date.
Meanwhile British Airways has seen its U.K. operations grind to a halt as a result of its first ever pilots’ strike. The airline, part of the International Airlines Group (IAG) was forced to cancel 1,700 flights to and from London’s Heathrow and Gatwick airports amid the standoff over pay.
Source: CNBC
