European markets are set to open mixed on Tuesday as hopes for monetary policy stimulus temper investor anxiety over an impending recession.
The FTSE 100 is seen around 5 points higher at 7,195, the DAX is set to climb around 7 points to 11,723 and the CAC 40 is expected to open around 3 points lower at 5,369, according to IG data.
Finnish central bank governor Olli Rehn said on Monday that the European Central Bank (ECB) was determined to act if the medium-term inflation outlook continues to miss its target of below but close to 2 percent.
This follows the German finance minster indicating over the weekend that the government is prepared to deploy fiscal stimulus to boost its ailing economy,
Meanwhile, stocks in Asia mostly edged higher Tuesday afternoon as the People’s Bank of China published new loan prime rates intended to lower borrowing costs for companies and stimulate the economy.
Investors stateside will be monitoring trade developments after the U.S. extended a reprieve permitting Chinese telecommunications giant Huawei to purchase components from U.S. companies to supply existing companies for 90 days. However, Washington’s Bureau of Industry and Security (BIS) also added another 46 Huawei affiliates to its blacklist, a move the tech company called “unjust” and “politically motivated.”
U.S. President Donald Trump on Monday also discussed economic ties and increased trade with Indian Prime Minister Narendra Modi.
Back in Europe, Italian politics remains a key focus as the government faces a no-confidence vote after Lega party leader Matteo Salvini pulled the plug on his coalition with the anti-establishment Five Star Movement (M5S).
Reuters reported on Monday that Italy’s opposition Democratic Party (PD) has held “good” initial talks with M5S over the prospect of a coalition, citing a PD source.
U.K. Prime Minister Boris Johnson will be in Paris Tuesday to meet with French President Emmanuel Macron as he seeks resolution to Britain’s current impasse with the European Union over Brexit.