A negative start for European markets, amid tensions in the Middle East

European stocks are expected to open lower Tuesday as global investors trim risky positions amid rising political tensions in the Gulf region and the ongoing turmoil in the White House which has essentially neutralised the administration of President Donald Trump.

Financial bookmakers are expected modest but consistent losses around the region Tuesday, with Britain's FTSE 100 poised to slip around 0.1%, with similar percentage declines seen for benchmarks in Germany and France.

The softer open follows a cautious session in Asia, which saw investors push the dollar back to post November election lows and trim crude prices further as the diplomatic row between Qatar and its Gulf neighbours intensifies.

The region-wide MSCI Asia ex-Japan index was marked 0.2% from its near two-year at 06:30 BST while Japan's Nikkei 225 gave back around 0.5% into the close as the yen firmed against the greenback and held down gains for export stocks.

The U.S. dollar index, a measure of the currency's strength against six of its global peers, was marked 0.2% lower at 96.61 in early European trading as investors continued to react to softer data from the world's biggest economy and positioned themselves ahead of potential testimony Thursday from former FBI director James Comey.

Politics also played a significant part in the two-day fall witnessed in global crude prices, which extended declines Tuesday amid the ongoing Saudi Arabia-led isolation of Qatar.

West Texas Interte crude futures for July delivery were marked 0.6% lower at
$47.12 as investors bet that the recent agreement by OPEC producers to extend their output cuts into 2018 could potentially unravel. Brent crude futures for the August, the global benchmark, were seen 0.5% lower at $49.17

U.S. equity futures point to a second day of declines at the open Tuesday, with the Dow Jones Industrial Average priced for a 15.5 point decline and the broader S&P 500 set to slide around 3 point, or 0.12%, from Monday's 2,436.1 point close.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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