Investors track U.S.-China tensions, economic reopening

European markets are heading for a lower open on Friday as escalating tensions between the U.S. and China push back on the week’s positive sentiment amid the reopening of economies across the continent.

Britain’s FTSE 100 is seen around 36 points lower at 6,183, Germany’s DAX is expected to fall by around 97 points to 11,684 and France’s CAC 40 is set to retreat by around 34 points to 4,736, according to IG data.

U.S. President Donald Trump is expected to hold a press conference Friday “on China” and markets are expecting a further souring of relations between the world’s foremost economic superpowers.

The White House has been ratcheting up pressure on Beijing for weeks over blame for the coronavirus and, more recently, a new security law for Hong Kong that threatens the special administrative region’s autonomy, according to Secretary of State Mike Pompeo.

Asian markets dipped on Friday after the Chinese National People’s Congress’ passed the new security bill late on Thursday, with Hong Kong’s Hang Seng index falling 0.7% to lead losses.

Thursday’s announcement of President Trump’s impending press conference caused Wall Street to give up the day’s gains in the last hour of trading, with all three major indexes closing lower for the first time in three days.

In Europe, France is set to enter the second phase of its coronavirus lockdown easing with restaurants, bars and cafes to reopen from June 2. Meanwhile in the U.K., groups of six people from different households will be allowed to meet in gardens as well as parks from Monday, provided households remain 2 meters apart.

European Union Trade Commissioner Phil Hogan told lawmakers Thursday that the bloc is willing to move forward when Brexit negotiations with the U.K. resume next week, and urged his British counterparts to do the same.

In corporate news, Renault has launched talks with unions over a mass restructure of its French factory operations, which would see manufacturing cease at several plants as the carmaker looks to axe 15,000 jobs worldwide in the hope of surviving a plunge in sales.

Investors may also have an eye on a slew of GDP (gross domestic product) and inflation data out of the euro zone on Friday, which could offer some insight into the impact of the coronavirus pandemic.

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