Europe open: Stocks slip on trade tensions, looming US Fed meeting

Stocks across the Continent have started the morning lower, with investors still very concerned about the ongoing stand-off between the US and China.

Speaking overnight, US President Donald Trump said he was only interested in a deal with Beijing if it was the same one as had been struck orignally.

"We had a deal with China and unless they go back to that deal I have no interest," Trump said before leaving on a trip to Iowa, a well-known farm state.

However, some analysts were already looking out to the following week's US central bank meeting, cautioning clients that the Federal Reserve might pour cold water on market expectations for a string of interest rate cuts.

"The inability of US stocks to push above this key resistance appears to mark a reluctance from investors to take the bull by the horns so to speak, ahead of next week’s Federal Reserve rate meeting, where US central bankers may well have to temper expectations about the prospects for possible rate cuts," CMC Markets UK's Michael Hewson said.

For their part, and on trade, economists at Bank of America-Merrill Lynch were telling clients: "We still believe that a "trade peace" is the optimal outcome for both sides and therefore remain optimistic, but we have been wrong so far and it may take longer for "cool heads" to prevail.""

Against that backdrop, as of 0926 BST the benchmkar Stoxx 600 was down by 0.46% to 379.14, alongside a drop pf 0.55% to 12,088.76 for the German Dax, while Milan's FTSE Mibtel was giving back 0.74% to 20,456.59.

On the corporate side of things, all eyes were on Spanish fashion giant Inditex and German publisher Axel Springer.

The former posted a 5% increase in sales for the three months to 30 April to reach €5.927m, but fell short of analysts' estimates for an increase of 8%.

However, the company's gross margins improved by 60 basis points from a year ago to reach 59.5% and management reiterated guidance for full-year like-for-like sales to be up by 4.0-6.0%.

Stock in Axel Springer meanwhile was rocketing higher, adding 12.24% on news that US private equity outfit KKR had offered to buy out minority shareholders in the media outfit at €63 per share.

There was little by the way of fresh economic news on the Continent.

In Spain, the national statistics office, INE, confirmed that the country´s harmonised rate of CPI slipped from 1.6% year-on-year in April to 0.9% for May, as expected.

Meanwhile, in France, INSEE reported a 0.4% or 93,800 person rise in non-farm payrolls for the first quarter to reach 25.33m.

As an aside, Standard&Poor's put out a note in which it predicted above average growth in Spain over the next two years, highlighting the deleveraging in the country´s corporate sector from its pre-financial crisis peak of 117% of GDP to 78%.