Global Markets
European stocks set to extend losses as France votes on its budget
Futures pointed lower and the French-German yield gap sat near its widest since the euro debt crisis ahead of a key Assembly vote.
HedgeWeekly News Desk ·
European equities looked set for a second day of losses on Tuesday. Euro Stoxx 50 futures were down between 0.6% and 0.7% before the open, while DAX futures fell 0.39% and FTSE futures 0.48%. Renewed selling of technology and AI shares and firmer oil prices weighed on sentiment.
The declines follow a weak Monday session in which the STOXX Europe 600 lost 0.9% to 639 and the Euro STOXX 50 fell 1% to 6,141. Banks led the drop, with Deutsche Bank, BNP Paribas, Santander, UniCredit and Intesa Sanpaolo each down more than 2%, and Airbus and Rheinmetall fell close to 3%.
France remains the focus. The National Assembly votes on Tuesday on the revenue half of the 2027 budget, which aims to cut the deficit to 5.0% of GDP from an expected 5.4% this year. The Assembly's finance committee rejected that section 31 to 3 earlier this month, and Moody's, which rates France Aa3 with a negative outlook, is due to review the country on Friday. Authorities have imposed curfews in several cities after weekend protests over living costs.
France's 10-year yield eased to about 4.9% after Monday's jump, but the spread over German Bunds stood at 147 basis points, the widest since the euro-zone sovereign debt crisis. ECB President Christine Lagarde has said the jump in yields is tightening financial conditions. German producer prices and the ZEW sentiment surveys are due later in the day.