European Shares Likely To See Subdued Start
European stocks are seen opening lower on Monday, with geopolitical tensions and continued uncertainty over the U.S.-China trade war likely to keep investors nervous.
After Iran announced that it would shortly boost its uranium enrichment above a cap set by a landmark 2015 nuclear deal, France, Germany and Britain – all parties to the deal – have expressed concerns over the step taken by Tehran.
Meanwhile, as top U.S. and Chinese officials organize a resumption of talks for this week to try to resolve a year-long trade war, Chinese Vice President Wang Qishan warned against “protectionism in the name of national security”, and called major powers to make more contributions to global peace and stability.
Elsewhere, Turkey’s lira fell after its central bank governor was replaced. The British pound hovered near a six-month low against the dollar as U.K. Conservative Party members vote today by post to choose Theresa May’s successor.
Federal Reserve Chairman Jerome Powell testifies before Congress on monetary policy and the state of the U.S. economy on Wednesday and Thursday as investors look for clarity on the central bank’s policy plans for the coming months.
The minutes of the June FOMC meeting as well as closely-watched reports on consumer and producer price inflation due this week could also have an impact on perceptions of the likelihood of an interest rate cut.
Closer home, industrial production and foreign trade data from Germany coupled with Eurozone Sentix investor confidence figures are due later in the day, headlining a busy day for the European economic news.
Asian markets fell, with benchmark indexes in Australia, Japan, China and Hong Kong losing 1-2 percent as hopes of steep cuts in interest rates by the U.S. Federal Reserve faded.
U.S. stocks fell from record highs on Friday, Treasuries tumbled and the dollar strengthened as a strong monthly jobs report dented hopes for a near-term interest rate cut by the Federal Reserve.
The Dow Jones Industrial Average and the S&P 500 slid around 0.2 percent, while the tech-heavy Nasdaq Composite edged down 0.1 percent.
The latest jobs report showed that U.S. employment surged up by 224,000 jobs in June after edging up 72,000 jobs in May. Economists had expected employment to increase by about 160,000 jobs.
European markets fell on Friday, with dismal German industrial orders data and fading hopes of a rate cut by Fed weighing on markets.
The pan European Stoxx 600 shed 0.7 percent. The German DAX and France’s CAC 40 declined around half a percent while the U.K.’s FTSE 100 gave up 0.7 percent.
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