European stocks seen pulling back at the open as trade, political developments fester
European stocks are expected to deliver a relatively muted open on Tuesday, following on from the weakness seen in markets overseas.
The FTSE 100 is seen 11 points lower at 7,448, the CAC is expected to open up 14 points at 5,466, while the DAX is poised to start relatively flat, up 1 point at 12,352, according to IG.
On Tuesday, market focus is likely to be circumnavigating political and trade developments going on around the world. On Monday, the latest round of tariffs went into effect between China and U.S. as the two major consumer nations failed to resolve their differences over trade.
In the latest surrounding the subject, China’s Vice Commerce Minister Wang Shouwen stated at a news conference Tuesday that it was tough to proceed with trade negotiations at present and that it would be dependent on the “will” of the United States as to when talks would resume; according to Reuters.
Meantime, concerns over the state of the U.S. administration put markets in the States on edge during their Monday session. Stocks on Wall Street dropped to session lows shortly after trading started following reports that Deputy Attorney General Rod Rosenstein was about to resign or be dismissed. The White House later however issued a statement, saying that both Rosenstein and the U.S. President would meet on Thursday, amid the conflicting reports. The political turbulence coming out of Washington comes just ahead of the midterm elections.
Looking more closely to home, Brexit continues to dominate the headlines. This Wednesday, British Prime Minister Theresa May is expected to meet with President Donald Trump during the United Nations General Assembly in New York, where they could discuss topics including Brexit and trade. This comes as the British leader faces more and more pressure over the future of divorce negotiations between the European Union and the U.K.
Last week at a summit in Austria, EU leaders rejected May’s “Chequers” plan, stating that more had to be looked into when it came to trade and the U.K.’s border with Ireland. On Tuesday, the Labour conference is set to hold a debate on Brexit, amid pressure over the request for a “People’s Vote” — a potential second referendum on leaving the bloc.
Overseas, the Federal Open Market Committee will kick off its two-day monetary policy meeting today, with analysts expecting the central bank to announce a quarter point rate hike when it concludes its meeting on Wednesday.
In corporate news, Manchester United, Thomas Cook and Next are scheduled to release fresh financial updates.
No major economic data is due out Tuesday.
Source: CNBC
