European markets are expected to open on a relatively flat note on Tuesday, as investors get to grips with the latest news surrounding Brexit talks, while gearing up for fresh economic data.
On the bourses front, the U.K.’s f is expected to open 2 points down at 7,335, while the German DAX is set to open 9 points lower at 13,049 and the French CAC down 8 points at 5,380, according to IG.
In the previous session, markets in the region closed higher with all the sectors bar technology finishing in positive territory, as chipmaker Dialog Semiconductor tumbled more than 24 percent.
Tech stocks also slipped stateside, adding pressure to the S&P 500 and Nasdaq composite. The Dow Jones industrial average however rose more than 300 points during U.S. trade, before closing up more than 50 points, after news that the Senate narrowly passed a major tax bill on Saturday. Markets in Asia meanwhile were trading relatively mixed on Tuesday.
Switching focus back to Europe, the topic of Brexit will continue to shake up sentiment. In the latest talks between the U.K. and European Union, both sides failed to agree upon the terms for the U.K. leaving the political-economic bloc on Monday.
However, European Commission President Jean-Claude Juncker said that while British Prime Minister Theresa May was a “tough negotiator”, this didn’t mean that talks were failing.
Meantime, Ireland’s Taoiseach Leo Varadkar said he was disappointed after the U.K. and EU negotiators failed to reach an understanding when it comes to the nature of Ireland’s border with Northern Ireland, after Britain leaves the EU, according to Reuters.
The Democratic Unionist Party (DUP) in Northern Ireland, a party supporting U.K. prime minister, has blocked any deal which means that Northern Ireland is treated differently from the rest of the U.K. post-Brexit.
Meanwhile, the wires agency also reported that senior politicians from Scotland, Wales and London said all three of their regions should benefit from any special deal, if any agreement is given to Northern Ireland in order to smooth access to European Union markets after Brexit.
The British Leader is now expected to meet with Spain’s Prime Minister Mariano Rajoy on Tuesday, where they are set to comment on topics such as Catalonia and Gibraltar, in addition to Brexit.
Sticking with the euro zone, finance ministers in the region selected Portugal’s Finance Minister Mario Centeno as the next leader of the Eurogroup, the body of euro zone finance ministers.
Meantime, investors will also be keeping a close eye on any news coming out of the U.S., in regards to an overhaul of the tax system and developments following news that the Supreme Court allowed the administration to enforce a travel ban on residents from six mostly-Muslim countries to the U.S.
Aside from politics, data is set to be a key point of focus Tuesday, with services PMI (purchasing manager’s index) data from Spain, Italy, France, Germany, and Britain are due, while composite PMI for the eurozone is also set to come out.
Retail sales for the euro area are also set to be released, while the minutes from the Bank of England’s latest Financial Policy Committee (FPC) are expected to be published in early trade.
Source: cnbc
European shares point to a weak open as Brexit news, data take spotlight