Global cues are pointing towards a lower opening for the major European markets on Tuesday. The U.S. market tumbled overnight after Fannie Mae and Freddie Mac fell to their lowest level in twenty years on concerns that the U.S. government may have to bail out the mortgage lenders. The Asian markets are trading sharply lower Tuesday on fresh fears about U.S. credit markets. Crude oil prices declined on Monday as Tropical Storm Fay steered clear of oil-producing infrastructure in the Gulf of Mexico.
However, the major European index futures are mixed. The FTSE 100 index futures show marginal strength, while the CAC 40 and DAX 30 index futures are showing weakness.
In the Asian session Tuesday, Brent North Sea crude was down 67 cents at $111.27 a barrel by 11:11 p.m. ET. In London Monday, October Brent crude futures fell 61 cents to settle at $111.94 a barrel on the ICE Futures exchange.
In Europe, the major economic data scheduled for release are the Euro-Zone and the German ZEW surveys for August and the German producer prices for July. In the U.S., traders await data on July housing starts and producer price index. Economists at UBS have predicted that housing starts and permits probably fell sharply in July.
The European markets fell for the first time in three days on Monday, as banking stocks edged lower following media reports of further troubles in the sector and a weaker dollar hurt export-sensitive stocks. The FTSEurofirst 300 index of pan-European blue chips closed down 0.1% at 1,189 and the narrower DJ Stoxx 50 index closed flat at 2,905. Around Europe, the U.K.`s FTSE 100 index slipped 0.08% to 5,450, France`s CAC 40 index declined 0.11% to 4,448 and Germany`s DAX index dropped 0.20% to 6,432.
On Monday, the Dow Industrials fell 1.55%, the broader S&P 500 index shed 1.51% and the technology-heavy Nasdaq composite index lost 1.45%.
In Asia Tuesday, Japan`s Nikkei 225 index is down 2.26%, South Korea`s KOSPI is down 1.95%, Australia`s All Ordinaries index is down 1.31% and Hong Kong`s Hang Seng index is down 0.65%. China`s Shanghai composite index is edging up 0.18%.
On the currency front, the euro slipped to a new multi-month low of 161.03 against the yen in Asian deals Tuesday, but it recovered against the dollar. The euro is largely choppy against the pound. At about 11:45 p.m. ET, the euro traded at $1.4695 and 0.7887 pound. The euro closed Monday`s European session at 0.7891 pound, 162.24 yen and $1.4740.
In the U.K., Brixton, Mears Group, Findel and Tribal Group are scheduled to report earnings. Kesa Electricals may see some activity after Goldman Sachs raised the rating of the company to `buy/cautious` from `sell/cautious`.
Renesola, the world`s largest recycler of scrap wafers used in solar panels, is scheduled to release a trading statement. Woolworths Group may react to a report by Financial Times that the grouping led by Baugur Group Hf, which was rebuffed by the board of Woolworths, has contacted other shareholders of the U.K. retailer in an effort to force its directors to open discussions.
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