European markets set for cautious open with Brexit, U.S. politics on the agenda

  • The U.K. and the European Union have indicated that a Brexit deal is still some way off after negotiations recommenced Monday over implementing their Withdrawal Agreement.
  • House Speaker Nancy Pelosi announced on Monday night that the Democrats were unveiling a new $2.2 trillion stimulus package.

LONDON – European markets are set to nudge higher at Tuesday's open, building on Monday's rally with Brexit talks, potential fiscal stimulus out of the U.S. and the first presidential debate on investors' radar.

Britain's FTSE 100 is seen around 12 points higher at 9,540, Germany's DAX is also set to climb by around 12 points to 12,883 and France's CAC 40 is expected to inch around 3 points higher at 4,846, according to IG data.

The cautious open follows mixed trading in Asia-Pacific overnight, where mainland Chinese and South Korean shares advanced while stocks in Hong Kong and Australia retreated slightly.

Stateside, stock futures for Tuesday are slightly higher following a rally on Monday, as investors prepare for the first presidential debate between President Donald Trump and Democratic challenger Joe Biden, with a clear victory for either party likely to cause some market movement.

Sentiment will likely be buoyed somewhat by news of progress toward a fresh fiscal stimulus package in the U.S., with House Speaker Nancy Pelosi announcing on Monday night that the Democrats were unveiling a new $2.2 trillion stimulus package, smaller than initially proposed but still well above what Republican leaders have offered.

Back in Europe, the U.K. and the European Union have indicated that a Brexit deal is still some way off after negotiations recommenced Monday over implementing their Withdrawal Agreement, which British Prime Minister Boris Johnson's government has sought to renege on.

In corporate news, the bitter fallout from LVMH's soured $16 billion acquisition of Tiffany continues, with the Louis Vuitton owner countersuing the U.S. jeweler on Monday and arguing that Tiffany's financial management during the coronavirus crisis nullifies the purchase agreement.

On the data front, final euro zone economic sentiment and consumer confidence readings are due at 10 a.m. BST on Tuesday.

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