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:

Down Again

Stocks slid in Asia after White House economic adviser Larry Kudlow downplayed the potential for a quick trade agreement between the U.S. and China, while Chinese President Xi Jinping's pledges to cut import taxes further and spend more on goods from abroad did little to boost sentiment. China Caixin purchasing managers' index data provided further evidence of an economic growth slowdown in the country. Once again, the European sectors most exposed to Chinese demand, ranging from miners to luxury goods, could be the most impacted this morning.

Concessions

Weekend reports said U.K. Prime Minister Theresa May had secured concessions from Brussels that will let her keep all of Britain in a customs union with the European Union to avoid a hard border in Northern Ireland. The pound initially rose, although later slipped as The Sunday Times report was downplayed by a spokesman. The European Union's chief negotiator, Michel Barnier, delivers a speech on Brexit to the Grandes Conferences Catholiques in Brussels Monday, while May's Cabinet will meet to discuss Brexit Tuesday.

Ferrari

Italian sports car-maker Ferrari NV, whose stock has risen about 140 percent since it began trading in Milan in early 2016, is due to give a third-quarter update later. It's unlikely to be a “consensus-busting” report, as limited production of the LaFerrari Aperta series comes to an end and currency headwinds continue to bite, Bloomberg Intelligence analysts say. Watch for any possible read-across for Aston Martin Lagonda Global Holdings Plc, whose shares have languished since its October trading debut.

Mail Woes

PostNL NV reported third-quarter revenue that was just shy of a company-compiled estimate. It's been a torrid year for European mail stocks, as the sector continues to reinvent itself as deliverers of goods bought on websites like Amazon.com Inc. amid a slump in paper-letter volumes. The U.K.'s Royal Mail Plc plunged last month after warning that cost cutting measures aimed at counteracting structural change were running behind schedule. Germany's Deutsche Post AG reports Tuesday. Also watch shares of Belgium's Bpost SA, as well as Austrian Post AG, on Monday.

Italy's Recipe

Euro-area finance ministers, including Italy's Giovanni Tria, meet in Brussels. Reports in the Dutch press said last week that 10 European Union finance ministers had sent a “hard warning to Rome,” in the form of a letter warning the country over its budget plans. The European Commission told Italy to resubmit its proposal last month amid concern over the nation's high debt levels. Italy's deputy prime minister told the Financial Times in an interview published Sunday that he believes Rome's controversial spending plans will become “a recipe” for reviving European growth

To contact the reporter on this story: Joe Easton in London at jeaston7@bloomberg.net

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

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