By Peter Nurse
Investing.com - European stock markets are seen trading lower Tuesday, with investors fretting over uncertainty surrounding the Biden stimulus plan as well as Italian political woe.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.7% lower, CAC 40 futures in France dropped 0.3% and the FTSE 100 futures contract in the U.K. fell 0.1%.
Equity markets have been expecting substantial fiscal stimulus from the U.S. for a few months now, and this optimism grew after Joe Biden proposed a $1.9 trillion package as one of his moves following his inauguration as the 46th U.S. President.
However, doubts have started to emerge about the timing of such a deal as U.S. lawmakers bicker about the size of the package needed to stimulate the country’s economy. Democratic Majority Leader Chuck Schumer warned Monday that a comprehensive deal could be four to six weeks away.
Back in Europe, Italian Prime Minister Giuseppe Conte is expected to hand in his resignation to the head of state on Tuesday, hoping President Sergio Mattarella will give him a mandate to form a new government with broader backing in parliament.
Conte suffered a political blow last week when a junior party left his coalition in a row over the government's handling of the coronavirus crisis and recession.
In corporate news, UBS (NYSE:UBS) will be in the spotlight after the Swiss banking giant reported net income of $1.71 billion for the fourth quarter of 2020, a 137% jump on the year before.
Drugmaker AstraZeneca (NASDAQ:AZN) will also be watched closely on Tuesday after a spat with the EU over the supply of its Covid-19 vaccine to the region.
This is also a big week for corporate earnings on Wall Street, with reports from the likes of General Electric (NYSE:GE), Johnson & Johnson (NYSE:JNJ) and Verizon (NYSE:VZ) before the opening bell and Microsoft (NASDAQ:MSFT) after the close.
The U.K. claimant count rose 7,000 in December, below than the 35,000 expected, while the unemployment rate rose to 5.0% in November, from 4.9% the previous month.
Oil prices weakened Tuesday on fading hopes of the rapid approval of additional U.S. stimulus, while the Covid-19 pandemic continues to cause severe economic damage.
U.S. inventory data from the American Petroleum Institute, an industry body, are due later in the session.
U.S. crude futures traded 0.6% higher at $52.45 a barrel, while the international benchmark Brent contract rose 0.6% to $55.34.
Elsewhere, gold futures fell 0.1% to $1,853.90/oz, while EUR/USD traded 0.1% lower at 1.2127.