Europe open: Stocks lower as traders keep an eye on politics

European stocks began the morning slightly lower on Tuesday despite stronger than expected data on investment out of China, as investors tracked a mixed close on Wall Street ahead of an avalanche of risk events the next day.

As of 0816 GMT the benchmark Stoxx 600 was lower by 0.26% or 0.97 points at 373.67, as the Dax retreated 0.11% to 11,978.33 and Milan's FTSE Mib declined 0.28%.

Adding to investors' caution perhaps, the pound was getting whacked in its cross against the US dollar, falling 0.72% to 1.2113, although the exporter-heavy FTSE 100 was benefitting from it. The euro was also higher against sterling, by 0.65% to 0.8776.

Overnight, parliament gave the Prime Minister the green light to trigger Article 50 of the Lisbon Treaty, with the Commons overturning the Lords amendments including giving Parliament a "meaningful vote" on May's negotiation terms with the European Union.

"Calls for a positive open come in spite of a mixed showing for Wall St and minor losses for Asia overnight as looming central bank meetings and geopolitics keep investors on their toes. The FTSE outperforms thanks to oil prices regaining poise, overnight macro data and FX moves after resilient data from China and a GBP pullback," said Mike van Dulken, head of research at Accendo Markets.

"Uncertainty still reigns on most fronts. Polls for the French Presidential Election have tightened. A Le Pen victory remains unlikely but cannot be ruled out. Politics will continue to be at the fore elsewhere in Europe, with the Dutch election, the UK triggering Art. 50, turmoil in Italy and ongoing negotiations with Greece. Prospects for the key pillars of Trump's economic agenda also remain uncertain," chimed in Jim Reid at Deutsche Bank.

Chinese fixed asset investment increased at a 8.9% year-on-year pace in January and February, according to the National Bureau of Statistics, versus a rise of 8.1% for December. In parallel, private investment growth jumped from a 3.2% clip to 6.7%.

Worth noting perhaps, the eastern seaboard of the US was literally expected to be buried under one to two feet or snow on Tuesday, which might affect trading on Wall Street later in the day.

Scheduled for Wednesday are the US Federal Reserve's policy announcement, elections in Holland and the expiry of the US government's debt ceiling.

In terms of economic data, on Tuesday morning harmonised German consumer prices were confirmed at up by 2.2% year-on-year in February, following an advance of 1.9% in the month before. Core prices were also higher, clocking in with an annualised gain of 1.3% versus 1.2% in January.

"Overall, we think core inflation pressure in Germany are building steadily, and that the core rate will hit 1.5%-to-1.6% towards the end of the year," said Claus Vistesen, chief euro area economist at Pantheon Macroeconomics.

Looking at Italy, Brussels believes there is a significant probability that Rome will miss its targets for reducing the public deficit, according to La Repubblica.

The Mediterranean country should cut its structural deficit by 0.6 percentage points in 2017, whereas Italy appears on track to worsen it by 0.4 points.

Still on the economic calendar for Monday were the ZEW institute's economic confidence index for the Eurozone in March (0900 GMT) and Eurozone industrial production figures for January (1000 GMT).

Lufthansa and Air Berlin were on the backfoot at the start of trading amid continuing strikes by ground crews at Berlin's airports.

RWE said it may lower its stake in the its networks and renewables arm Innogy to 51.0%, amid reports that France's Engie was mulling a bid.