European Shares Seen Lower As US-China Tensions Escalate

European stocks may open lower on Tuesday as investors keep an eye on the simmering U.S.-China tensions and await the release of minutes from the U.S. Federal Reserve meeting.

As tensions between Washington and Beijing escalate, the Trump administration announced on Monday it will further tighten restrictions on Huawei Technologies in a bid to limit the company’s access to electronic components.

“We don’t want their equipment in the United States because they spy on us,” President Donald Trump said in an interview on “Fox and Friends.”

The minutes of the U.S. Federal Reserve’s last policy meeting will be out on Wednesday, with investors looking for any clues about an anticipated shift in the policy outlook.

Asian markets are trading mixed amid the political stalemate in the U.S. over additional fiscal stimulus.

Speaker Nancy Pelosi announced Sunday night that she and fellow Democratic leaders are calling the House back into session from a summer recess to defend what they say is Donald Trump’s attack on the U.S. Postal Service.

The dollar dipped and Treasuries climbed, while gold edged up on dollar weakness. Oil prices declined after OPEC+ said the producer grouping is almost fully complying with output cuts.

U.S. stocks rose overnight as a rally in technology companies outweighed a selloff in the banking sector. The tech-heavy Nasdaq composite rallied 1 percent and the S&P 500 edged up 0.3 percent, while the Dow Jones Industrial Average shed 0.3 percent.

European markets advanced on Monday after the People’s Bank of China injected liquidity into the financial system to help lenders manage upcoming government bond sales.

The pan-European Stoxx Europe 600 index gained 0.3 percent. The German DAX and France’s CAC 40 index inched up around 0.2 percent, while the U.K.’s FTSE 100 added 0.6 percent.

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