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European Markets Decline On Subdued Economic Data, Deflation Worries

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European Markets Decline On Subdued Economic Data, Deflation Worries

European stocks are cooling off in early trade on Tuesday after a three-day rally ended on Monday. Major U.S futures are also trading lower, along with Asian stocks having a mixed session. Dow Jones futures are trading 0.50% lower and S&P 500 futures are down 0.52% at press time.

Euro Stoxx 50 index is trading 0.38% lower at the time of publication, led by midcap and bank stocks.

London's FTSE 100 index is trading 0.50% lower after the unemployment rate in August increased to 4.5%, which compares with an expectation of 4.3% and 4.1% in the previous month. The three-month change in the number of employed people showed a huge decline of 153,000 versus an expected decline of 30,000. The average earnings growth remained flat in August compared to an expected decline of 0.6%%. The worse is not over for the United Kingdom due to new restrictions imposed by the government to contain the rise in coronavirus cases.

Germany's DAX is trading 0.41% lower after the country's September Consumer Price Index declined 0.2% month-over-month. Though the number was expected, this has led to deflation worries prompting for more stimulus and discussion on negative interest rates. Investors will be watching Germany's ZEW Economic Sentiment indicator due late Tuesday.

France's CAC 40 index is trading 0.39% lower at press time, dragged down by large and mid-cap stocks. No major economic events are due Tuesday.

Spain's IBEX index is also trading 0.50% lower.

U.S. Dollar Index futures have advanced 0.15% at press time to 93.243 as the dollar gains 0.22% against the Euro to $1.1787 and 0.24% against the Sterling to $1.3034 at press time.

ETFs to watch Tuesday: iShares MSCI Eurozone ETF (BATS: EZU), which closed 0.73% higher on Monday and is up 24.3% in the last six months; iShares Core MSCI Europe ETF (NYSE: IEUR), which closed 0.67% higher on Monday and is up 20.44% in the last six months; Invesco CurrencyShares Euro Trust ETF (NYSE: FXE), which closed 0.12% lower on Monday but is up 7.52% in the last six months.

 

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