European Stock Markets Head South

European stock markets are heading south, after a largely negative session in Asia. The escalating trade tensions continue to hang over markets and President Donald Trump’s confirmation of China tariffs on Friday already saw Wall Street closing lower. China was quick to retaliate and the exchange of threats has fueled another wave of risk aversion.

An earthquake in Japan, meanwhile, added to pressure on Topix and Nikkei, which closed with losses of 0.75% and 0.98%, respectively. Hong Kong and China were closed for a holiday. In Europe, the FTSE 100 is outperforming amid a weaker pound, but also down 0.18% ahead of key Brexit votes in parliament this week.

The DAX, meanwhile, is underperforming and down 0.75% as German Chancellor Angela Merkel’s battle with Intererior Minister Horst Seehofer (Christian Social Union) risks the breakup of the CDU/CSU alliance, although Merkel does in theory have other alternatives to maintain a majority in parliament, Action Economics said. The Euro Stoxx 50 is down 0.52% on a day void of key data releases and with the focus on political risks.