Here’s What to Watch in European Stocks This Morning

(Bloomberg) -- Good morning. This is what we’re watching ahead of the market open in Europe, including…

The Backstop

Euroskeptic Tories are likely to be annoyed that U.K. Prime Minister Theresa May has insisted the most contentious part of her Brexit plan, the Irish backstop, will remain in place. She will seek changes to the backstop from the European Union, but not push any MPs to accept a plan to scrap it altogether. Given the miserable services data for the U.K. on Tuesday, the pressure is growing to find a way to a deal to end the uncertainty, to which end May will be back in Belfast and then head to Brussels on Thursday.

Revving Up

German car maker Daimler AG takes the stage with the first update from the autos sector this season. It’ll be closely watched for comments on trade not just for other autos names, but also any other trade-sensitive stocks. The banking sector gets back into the swing of it with numbers already out from BNP Paribas SA, ING Groep NV and Nordea Bank ABP, and brewer Carlsberg A/S is talking up a planned share buyback and the successful conclusion to its cost-cutting program.

State of the Union

If one was awaiting some conciliatory language from U.S. President Donald Trump’s State of the Union address, coming in the wake of the country’s longest ever government shutdown, one would be disappointed. Trump called for bipartisanship but only on his terms, yielding no ground to Democrats. Two notes stood out for markets. Trump reiterated a trade deal with China would need to include structural change on China’s part. And the president made an allusion to lowering drug prices, another favored topic he often tweets about.

Oil Slippage

Crude prices dipped a little and a close eye should be kept on them again on Wednesday with U.S. inventories data ahead. Oil futures were volatile on Tuesday, knocked back by concerns about weakness in the services sector in the U.S. Crude is about flat on the day this morning. Asian stocks, where trading this week is curtailed by Lunar New Year celebrations, were muted with the State of the Union having little impact and more attention on the Australian central bank’s shift to a more neutral policy stance.

Coming Up…

Federal Reserve Chairman Jerome Powell will speak at a town hall event in Washington, his first public comments since the last rate meeting and decision. U.S. crude oil inventories are ahead, as are earnings in the U.S. from General Motors Co. And Brazil’s central bank will announce its rates decision on what will likely be the final meeting under its current governor, Ilan Goldfajn.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours

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