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European Shares Seen Opening On Cautious Note

european market 021219 13jan20 lt

European stocks are likely to open on a cautious note Monday as investors await the signing of a "phase one" trade deal between the U.S. and China.

The deal due to be signed at the White House on Wednesday might include a commitment from China to increase agricultural products and implement economic reforms as well as some relief to China's aquatic exports to the U.S.

Meanwhile, Iran admitted that it had mistakenly shot down a Ukrainian airliner, three days after the crash that killed 176 people.

Ukraine International Airlines flight, en route to Kyiv, was shot down on Wednesday near Imam Khomeini Airport in Tehran shortly after take-off, and only hours after Iran had fired missiles at two air bases housing US forces in Iraq.

Those attacks were Iran's response to the U.S. killing of senior Iranian commander Qasem Soleimani in a drone strike in Baghdad on 3 January.

In another development, a volley of rockets slammed into an Iraqi airbase north of Baghdad where U.S. forces have been based, wounding four local troops, the Iraqi military said on Sunday. At least four Iraqi airmen were wounded in the attack.

Asian markets are trading mixed and gold prices fell on dollar strength amid optimism on the Sino-U.S. trade front, while the pound slipped after Bank of England policymaker Gertjan Vlieghe said he will vote for a cut in interest rates later this month, barring an "imminent and significant" improvement in the growth data.

In economic releases, sentiment among British financial services firms improved for the first time in twelve quarters, survey results from the Confederation of British Industry and PwC showed today.

A balance of 8 percent expects business situation to improve compared with three months ago. This was the fastest since June 2015. However, a balance of 19 percent said business volumes decreased in three months to December.

Monthly GDP estimate, industrial production and foreign trade reports are due from the U.K. later in the session, headlining a light day for the European economic news.

U.S. stocks pulled back from record closing highs on Friday as the latest jobs report proved to be a mixed bag.

Job growth slowed more than expected in December and wage growth dropped below 3 percent for the first time since July 2018, while the unemployment rate stayed at a 50-year low of 3.5 percent, the Labor Department's monthly report showed.

The Dow Jones Industrial Average dropped half a percent, while the S&P 500 and the tech-heavy Nasdaq Composite shed around 0.3 percent each.

European markets gave up early gains to end lower on Friday after the U.S.
announced new sanctions on Iran's metal exports and eight senior Iranian officials.

The pan European Stoxx 600, the German DAX, France's CAC 40 index and the U.K.'s FTSE 100 all slid around 0.1 percent.

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