European Shares Seen Lower On Risk Aversion

(RTTNews) - European stocks are seen opening lower on Tuesday, extending losses from the previous session as the cryptocurrency slump intensified and incoming economic indicators point to a slowing U.S. economy.

Cryptocurrencies, including Bitcoin, Ethereum, XRP, and Dogecoin, fell sharply on Monday as investors rotated away from riskier assets amid broader market negativities.

Rising Japanese government bond yields and yen strength threatened to unwind the decades-old yen carry trade, sparking global deleveraging in equity and crypto markets.

As economic uncertainties mount, investors are focused on the path forward for U.S. monetary policy.

The week ahead is set to offer a crucial snapshot of U.S. economic momentum, heading into the Federal Reserve's policy announcement next week.

The delayed September Personal Consumption Expenditures (PCE) Index, the Fed's preferred inflation gauge, is due on Friday. The report may show that inflationary pressures are stable, but sticky.

Other relevant economic data due this week include November ADP private employment figures and a preliminary reading of consumer confidence in December.

Due to the proximity to the central bank's policy meeting, Federal Reserve Chair Jerome Powell on Monday steered clear of commenting on economic conditions or monetary policy.

Asian markets were mostly higher, with a Japanese government bond auction and China property jitters in focus. Regional gains were capped amid significant crypto liquidations and rising Treasury yields.

Treasuries steadied after falling across the curve on Monday. The dollar remained under pressure as weak manufacturing data boosted the case for a Federal Reserve rate cut next week.

Gold ticked lower after hitting a six-week high on Monday. Oil was little changed after rising sharply in the previous session amid supply chain disruptions.

U.S. stocks ended firmly in the red overnight after closing higher for five consecutive sessions. Risk aversion spread across markets as Treasury yields surged following weakness in Japanese and European government bonds.

The Dow dipped 0.9 percent, the tech-heavy Nasdaq Composite shed 0.4 percent and the S&P 500 dropped half a percent.

European stocks closed broadly lower on Monday as data showed Eurozone manufacturing slipped back into contraction in November.

The pan European Stoxx 600 slid 0.2 percent. The German DAX lost 1 percent, France's CAC 40 eased 0.3 percent and the U.K.'s FTSE 100 slipped 0.2 percent.