European stocks are expected to open lower again Tuesday, extending the biggest single-day decline since November, as investors continue to adopt a defensive posture amid the escalating political crisis in the United States over President Donald Trump's controversial immigration orders.
Britain's FTSE 100 will likely tick about 0.09% lower at the start of trading, according to financial bookmakers IG, with similar percentage declines anticipate for markets in Germany and France. Market direction is also likely to be influenced by key inflation data from Eurostat, the EU's official statistics office, which publishes its January estimate of consumer price inflation. Economists are expecting a reading of around 1.7%, which would be the fastest in at least three years
Overnight in Asia, volumes remained thin owing to a series of holiday observances that will keep major markets in China closed for much of the week. The region-wide MSCI Asia ex-Japan index, however, extended Monday's losses to trade 0.45% lower by 06:45 GMT, led by a 16 point decline for South Korea's KOSPI Composite Index. Japan's Nikkei 225 notched its second consecutive session loss, falling 1.7% to 19,041.34 points as a modestly stronger yen held down export stocks.
The Bank of Japan concluded its regular policy meeting Tuesday and, as expected, made no changes to its central aim of maintaining a -0.1% interest rate and keeping 10-year bond yield at near zero percent in context with its program of quantitative easing.
Yen strength was linked to safe-have flows amid another day of weakness for the U.S. dollar, which fell against a basket of six global currencies to trade 0.2% lower at 100.26 as investors reacted to the President's determination to see through his controversial Executive Orders on immigration - to the point where he fired his Attorney General, Sally Yates, after she refused to carry out his demands.
The moves have unsettled investors around the word, many of whom are concerned that Trump will become distracted from his economic agenda or, in a worst-case-scenario, will find himself embroiled in a Constitutional crisis that will make it difficult or impossible for his administration to govern.
U.S. equities, which booked losses Monday amid the global market sell off, are poised to trade lower again at the opening bell on Wall Street, with the Dow Jones Industrial Average likely to fall 56 points, according to current futures prices.