European stocks are expected to open lower on Tuesday morning on rising tensions between North Korea and the United States.
Investors will take cues from Asian stocks, where shares dropped after North Korea’s Foreign minister said Monday that one tweet from President Donald Trump over the weekend was a declaration of war. As such, Pyongyang reserved the right to take countermeasures, which could include shooting down U.S. bombers even if they are not in North Korea’s air space.
In Europe, German Chancellor Angela Merkel has begun coalition talks with three other parties to build a new government, after the far-right AfD party beat forecasts and become the third largest presence in parliament. In Brussels, Brexit negotiations seemed to have resumed on a tough footing after Michel Barnier, the EU’s chief negotiator, said that they cannot discuss a transition deal, like U.K. Prime Minister Theresa May had asked, before settling the issues of citizens’ rights, the Irish border and an exit bill.