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European Shares Set For Weak Start As Trade Worries Persist

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European stocks are likely to open lower on Wednesday after a former leading trade advisor to U.S. President Donald Trump said there won't be a trade deal
at the upcoming G-20 summit.

Clete Willems told Kayla Tausche at CNBC's Capital Exchange event in Washington that looking at a three- or six-month time frame might be more reasonable.

Meanwhile, after the Trump administration escalated threats to hit Beijing with new tariffs, China's foreign ministry reportedly said it would respond firmly if the U.S. insisted on escalating its standoff with China.

Asian markets are trading mostly lower on concerns of slowing growth in China as official rhetoric from Beijing continued to harden.

China's consumer inflation hit a 15-month high in May, but factory gate inflation slowed in May amid sluggish commodity demand and faltering manufacturing activity, reinforcing economic growth worries.

The U.S. dollar held steady after Trump said the euro and other currencies are undervalued against the dollar, putting the U.S. at a big disadvantage. Trump also said that the U.S. has low inflation and the officials of the Federal Reserve "don't have a clue" on rates.

Oil prices fell nearly 2 percent in Asian trading after the U.S. Energy Information Administration (EIA) cut its forecasts for 2019 world oil demand.

U.S. consumer inflation data as well as ECB President Mario Draghi's speech at a conference in Frankfurt may sway sentiment as the day progresses.

In the U.K., the race to succeed Theresa May heats up with ten Conservative candidates likely to contest today's first round of voting.

Euro-area finance ministers will be meeting in Luxembourg Thursday to decide on the euro-area budget.

U.S. stocks finished marginally lower overnight. The Dow slipped 0.1 percent to snap a six-session winning streak while the tech-heavy Nasdaq Composite and the S&P 500 ended largely unchanged with a negative bias.

European markets rose for a third consecutive session on Tuesday after Chinese authorities backed special-purpose bond issuances by local governments in a bid to spur growth.

The pan European Stoxx 600 gained 0.7 percent. The German DAX climbed 0.9 percent, France's CAC 40 index rose half a percent and the U.K.'s FTSE 100 added 0.3 percent.

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