European markets are expected to open lower on Wednesday as investors gear up for earnings and fresh data, while digesting the latest news surrounding Brexit, Europe and what’s going on in the U.S. political sphere.
On the bourses front, the U.K.’s FTSE 100 is expected to open 40 points down at 7,287, while the German DAX is set to open 61 points lower at 12,987 and the French CAC down 20 points at 5,355, according to IG.
Sentiment in Europe is likely to be dampened on Wednesday following lackluster trading sessions in Asia and Wall Street. On Wednesday, most markets in Asia fell following declines in the U.S., where the S&P 500 posted its first three-day losing streak since August.
In Europe’s previous session, meanwhile, markets in the region ended in the red amid uncertainty surrounding Brexit negotiations.
In the latest news surrounding the divorce proceedings between the U.K. and the European Union (EU), British leader Theresa May is facing pressure from fellow political parties to soften negotiations by keeping the U.K. within the customs union and the single market after it leaves the political-economic bloc, Reuters reported.
Consequently, investors will be paying close attention to the British pound during the week as it battles with Brexit developments. Speaking of currencies, Bitcoin broke above the $12,000 mark prior to the European open, as the cryptocurrency continued to advance.
Looking beyond the region, the U.S. continues to move markets worldwide as the Trump administration shakes up investor sentiment with a variety of actions, from tax reform to travel bans and rumblings surrounding its relationship to Russia.
In the latest surrounding the U.S. political space, President Donald Trump is set to announce that the U.S. will recognize Jerusalem as Israel’s capital on Wednesday, with senior administration officials saying the embassy will be moved there, although noted that this could take “years”. The move is controversial in the Middle East and has been criticized by Turkey, among others.
In data, construction PMI (purchasing manager’s index) data for Germany is expected to be published.
Meantime, the governing council of the European Central Bank are expected to hold a non-monetary policy meeting in Frankfurt.
European shares point to lower open following market weakness overseas