Shares in Europe are expected to open sharply lower Monday morning as investors question the stability of the German government and wider trade links between the European Union and the U.S.

The FTSE 100 is seen down by 74 points at 7,586; the DAX is set to open lower by 110 points and the CAC 40 is seen off by 55 points at 5,278; according to IG.

Market players are following news that the German interior minister has offered to resign over differences with Chancellor Angela Merkel on migration. Horst Seehofer, also leader of the sister party of Merkel’s CDU (Christian Democratic Union), is a key player in the current German government and his potential withdrawal could jeopardize Merkel’s future as chancellor.

The European Union has threatened to impose new retaliatory tariffs worth $300 billion if the U.S. moves forward with tariffs on European cars, the Financial Times reported. Furthermore, the White House has prepared a bill that allows it to unilaterally increase tariffs without the approval of Congress, Axios reported.

Investors will also monitor new data releases, with manufacturing PMIs in the euro zone due at 9 a.m. London time and unemployment figures due at 10 a.m. London time.

Source: cnbc
European markets seen sharply lower on politics and trade concerns