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:

Unprecedented Steps

Italy continues to hog attention in European markets, and there’s no reason Tuesday should be any different. After the government continued a staunch defense of its budget, the European Commission is likely to make a decision on Tuesday on whether to formally demand that officials take back, revise and resubmit the figures, something it has never done before. Commissioners have said the budget breaks European Union rules and asked Italy to change tack, but there’s little sign of that happening. So, once more, keep a close eye on Italian stocks, government bonds and corporate credit markets for turmoil anew.

‘Not Satisifed’

Watch the twists and turns yet to come surrounding Saudi Arabia. U.S. President Donald Trump said he’s still not satisfied by the explanation the Saudis have given for the death of Jamal Khashoggi. In an interview with USA Today, Trump called the journalist’s killing in the Saudi consulate in Istanbul “foolish and stupid” but added he thought it was a “plot gone awry.” On Tuesday, Turkish President Recep Tayyip Erdogan is set to give all the details of what happened to Khashoggi “in all its nakedness,” timing the revelations to coincide with a Saudi investment conference most known at this point for the number of people to have dropped out. WTI crude oil slipped below the $70-per-barrel mark and Brent fell below $80 after Saudi Arabia said it has no intention of using its oil wealth as a political tool and with American inventories seen rising for a fifth consecutive week.

GAM Woes

It has been an annus horribilis for Swiss asset manager GAM Holding, and we’ve now seen quite how much damage has been done. The group has been hit hard this year following the suspension of a star fund manager that prompted a flood of fund redemptions and cut its share price in half. Earlier this month, it was revealed the group has held talks with potential buyers. The numbers are not pretty. Assets in the investment management business fell 21 percent to 66.8 billion francs ($67 billion) since the end of June, GAM said early Tuesday.

Hotels and Malls

Two updates to provide two health checks on the U.K. property market. Whitbread Plc will be closely watched for how its Premier Inn hotel chain is doing after it agreed to offload the Costa Coffee business to Coca-Cola Co. Watch also for Intu Properties Plc, a shopping mall owner and near-permanent bid target, which confirmed it had received a sweetened takeover offer from its biggest shareholder and Canada’s Brookfield Property Group last week. Beyond that, however, look for details on how its shopping centers are doing following a slew of bankruptcies and warnings on Britain’s high streets.

DIY In The U.K.

Travis Perkins Plc, the U.K. building merchant and owner of the Wickes DIY retail chain, is due to give a third-quarter trading update before the market opens. The sector, which has been weighed down by damped consumer confidence and delays to construction projects since the U.K.’s vote to leave the European Union, is also seen as a broader economic indicator and gauge of consumer confidence. Watch B&Q-owner Kingfisher Plc, among others, for a potential read-across.

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