European stocks seen sharply lower as Trump threatens new tariffs

European stocks are due to open significantly lower Tuesday as investors worry that the U.S. and China are getting closer to a trade war.

The FTSE 100 is seen off by 32 points at 7,597; the DAX in Germany is set to open lower by 114 points at 12,721; and the CAC 40 is seen down by 43 points at 5,405; according to IG.

The opening calls reflect concerns over trade tensions after President Donald Trump warned of potential fresh tariffs on China.

Trump said Monday he could add another 10 percent tariff on $200 billion worth of Chinese goods. The move came after Beijing earlier on Monday said it impose duties on $50 billion of U.S. goods, which it claimed was in response to new U.S. levies announced Friday.

As a result, the dollar traded lower against the yen early Tuesday morning.

In commodity markets, oil prices fell ahead of a key meeting of OPEC and non-OPEC producers later this week. There are expectations that OPEC countries and allies like Russia will gradually increase their output.

In terms of data, the calendar is thin with only euro area construction output numbers due at 10 a.m. London time.

Meanwhile, markets will watch out for comments from central bankers, meeting in Sintra, Portugal, this week. Tuesday’s speakers include European Central Bank (ECB) President Mario Draghi, Federal Reserve Bank of St Louis President James Bullard and ECB Executive Board Member Peter Praet.

Source: CNBC