Here’s What to Watch in European Stocks This Morning

(Bloomberg) -- Good morning. Here's what we are watching ahead of the market open in Europe:

Trade and Oil

Stocks in Asia were back in the red on Tuesday after the trade truce between the U.S. and China had supercharged trading on Monday. With little specifics to go on as to how exactly trade tensions are going to be permanently eased, some of the gains seen on Monday just might be given back. Crude, however, is on track for its biggest two-day gain since June, following an auspicious start to the week which boosted shares in the European oil and gas sector, so that sector may avoid any slip backwards.

READ: Stocks Slide Anew With Trade-Talk Outlook ‘Hazy': Markets Wrap

Macron's Challenge

French President Emmanuel Macron is having a rough end to the year. The “Yellow Vest” protests have created an unprecedented domestic challenge for him to navigate through at a time when his approval rating has cratered. In addition, his grand plans for euro-area integration are also looking all but dead. France had been a bastion of stability in a volatile year for European politics, but that seems to have ended and it will be worth keeping a close eye on the mood in French assets going forward.

Self-Driving

BMW AG, fresh off a very strong day of recovery for battered European carmaker stocks, is in talks with peers to get involved in its automated driving group and anticipates adding new members in coming months. An easing of trade fears gave the industry a boost on Monday but the long term remains focused on building a lead in electric and autonomous vehicles, so watch for any updates on this from other automakers in coming weeks. Do also note, however, BMW detailed a series of headwinds it anticipates facing in 2019, which may take some of the sheen off the trade truce-driven gains on Monday.

Construction Bellwether

Ferguson Plc is due to update on trading and that should provide an interesting insight into the state of construction markets, particularly in the U.S. This should provide some read-across into other U.S.-exposed names like Ashtead Group Plc and CRH Plc. The update will come after the sector, already buoyed by the easing trade tensions, got an extra fillip in afternoon trade when a key U.S. manufacturing gauge rebounded in November.

Online Trading

Contracts-for-difference broker IG Group Holdings Plc, the largest of the three notable firms in this industry listed in London, will give an update on recent trading. The online retail broking industry has grown very quickly in recent years but hit a stumbling block this year as the threat of regulation has increased. Watch for updates on this and on whether recent volatility in stocks and in the cryptocurrency market is having an impact.

To contact the reporter on this story: Sam Unsted in London at sunsted@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Blaise Robinson

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