The European Commission cut its growth forecasts for the Eurozone economy Tuesday, citing slowing global trade, manufacturing sector weakness and Brexit uncertainty.

In its regular Spring Economic forecast, published in Brussels, the Executive branch of the European Union said it sees 2019 growth of 1.2%, followed by a moderating rate of recovery to 1.5% in 2020. Both forecasts are weaker than their February outlooks, which include estimates of currency area inflation of just 1.4%, well shy of the European Central Bank's price stability target of 'just under 2%'.

"The European economy will continue to grow in 2019 and 2020. Growth remains positive in all our Member States and we continue to see good news on the jobs front, including rising wages," said Economic and Financial Affairs Pierre Moscovici. "This means that the European economy is holding up in the face of less favourable global circumstances and persistent uncertainty."

"Nonetheless, we should stand ready to provide more support to the economy if needed, together with further growth-enhancing reforms. Above all, we must avoid a lapse into protectionism, which would only exacerbate the existing social and economic tensions in our societies," he added.

The euro was marked 0.3% lower against the U.S. dollar following the Commission forecasts, while the region-wide Stoxx 600 benchmark extended declines to trade 0.61% lower from Monday's closing levels.

U.S. stocks extended declines in pre-market trading as well, with futures contracts tied to the Dow Jones Industrial Average suggesting a 170 point decline, while those linked to the S&P 500 indicating a 20 point pullback. 

Benchmark 10-year German bund yields, a proxy for risk-free borrowing rates in the single currency economy, hit a four-week low of 0.034% following the report, which included both a markdown for GDP growth in the region's largest economy and a gloomy prognosis for public debt levels in Italy, which it sees rising to 133.7% of GDP this year.

Italy's benchmark FTSE MIB stock index slipped into negative territory following the outlook, while a sub-index of bank stocks slumped more than 2%.