By Peter Nurse
Investing.com - European stock markets are seen opening lower Tuesday amid heightened tensions between the U.S. and China, although moves are likely to be limited ahead of news from the Federal Reserve and key business surveys later in the week.
At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.1% lower, the FTSE 100 futures contract in the U.K. fell 0.3%, while CAC 40 futures in France dropped 0.1%.
Sino-U.S. tensions have weighed on market confidence of late, and the Trump administration stated Monday that it would further tighten restrictions on China's Huawei Technologies, cracking down on its access to commercially available chips. Stocks of Asian chipmakers fell in response.
The curbs follow U.S. President Donald Trump’s ban on the Tiktok and WeChat apps in the U.S. and the introduction of a new security law in Hong Kong.
The two sides also postponed a planned six-month review of their phase-one trade agreement at the weekend.
Still, stock market moves are likely to be small ahead of Wednesday's release of the Federal Reserve minutes, with speculation that the Fed will adopt an average inflation target. Given inflation has been below target for some time, an average inflation target would imply the central bank is happy to have a loose monetary policy for a longer period than might ordinarily have been expected.
Additionally, markets will be keeping an eye on flash PMI surveys on manufacturing and service sector activity, due Friday, which should show whether the European recovery id still on track.
In corporate news, BHP is likely to be in the spotlight after the Anglo-Australian mining giant reported a more than 4% drop in annual profit, hit by $1.1 billion in one-off charges, including costs tied to its coronavirus pandemic response.
It also declared a final dividend of 55 cents per share, down from 78 cents a year earlier.
Also of note, Geberit posted a first-half net profit of 315 million Swiss francs ($347.4 million), a 14% drop compared with the same period last year, with the Swiss sanitary-products manufacturer citing the impact of the pandemic and negative currency developments.
Oil prices edged lower Tuesday, remaining in a tight range as the market awaits the American Petroleum Institute’s crude oil stocks update, due later in the day, and then Wednesday’s OPEC+ joint ministerial monitoring committee meeting for further production clues.
The Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+, reduced their agreed cuts to 7.7 million barrels per day in August from 9.7 million barrels per day previously as prices started picking up.
Compliance with these output cuts was seen at around 97% in July, two OPEC+ sources told Reuters late Monday.
U.S. crude futures traded 0.3% lower at $42.77 a barrel, while the international benchmark Brent contract fell 0.2% to $45.28.
Elsewhere, gold futures rose 0.3% to $2.005.20/oz, helped by a weaker dollar, with EUR/USD traded 0.2% higher at 1.1893.