Europe midday: All eyes on White House after allegations Trump shared secrets with Russia
Another move higher in the European single currency is weighing modestly on stocks amid newspaper headlines in the States alleging that US president Donald Trump shared intelligence secrets with visiting Russian diplomats.
As of 1200 BST the benchmark Stoxx 600 was off by 0.20% at 395.18, alongside a dip in Germany´s Dax of 0.06% to 12,798.73 and a fall of 0.33% in the Cac-40 to 5,400.22.
Automobiles and Travel&Tourism stocks were especially weak, with the corresponding Stoxx 600 sector indices retreating by 0.51% and 0.53%, respectively.
In parallel, the US dollar index was near six-month lows and euro/dollar up by 0.79% to 1.1061, with technical analysts at Web Financial Group pointing out that the next level of technical resistance lay at 1.1299, at the downtrend from its April 2015 highs.
Some market commentary put those gains in the euro down to the reports swirling around the White House, with Trump now set to meet Turkish president Recep Tayyip Erdogan on Tuesday.
Nonetheless, following her meeting on Monday with newly-elected French president Emmanuele Macron, Chancellor Merkel said EU treaty changes were possible if it made sense in order to strengthen the euro area.
"Trump has been not only strongly criticised by the Democrats, but by some influential Republicans, including John McCain who reportedly said that such revelations were "deeply disturbing" if confirmed.
"In terms of potential implications for the markets, finding support in Congress for fiscal measures may prove even more difficult for President Trump if the latest reports undermine his relationship with the Republicans," said Piotr Matys at Rabobank.
Economic growth in the Eurozone was confirmed by Eurostat at 0.5% quarter-on-quarter (1.7% year-on-year) for the first three months of the year, as expected.
That came amid data showing that the single currency bloc's trade surplus hit €23.1bn in March, up from €18.8bn in the month before (consensus: €18.7bn).
The ZEW index of investor confidence in the German economy improved from 19.5 in April to 20.6 for May (consensus: 22.0).
Still on the economic calendar for Tuesday, figures on US housing starts and industrial production are scheduled for release ater in the day, at 1330 BST and 1415 BST, respectively.
EasyJet was proving a drag on Travel stocks after it posted a worse than expected pretax loss of €212.0m for the first half of the year.
Car manufacturers were put on the backfoot by data from ACEA showing that registrations in the European Union dropped by 6.8% in April, albeit in part due to there being two less trading days because of a shift in the timing of Easter. A 20% plunge in UK car sales on the back of a new vehicle excise duty and as consumer feel the pinch from Brexit was the other key factor.