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At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.1% lower, CAC 40 futures in France dropped 0.2% and the FTSE 100 futures contract in the U.K. fell 0.3%.
Sentiment has been hit Tuesday by the release of a private-sector survey showing China’s services activity expanded at the slowest pace in eight months in August, with stimulus having so far failed to meaningfully revive the second largest economy in the world.
The Caixin services purchasing managers’ index rose 51.8 in August, lower than expectations for a reading of 53.6 and July’s figure of 54.1.
This disappointing reading offset some of the optimism seen on Monday after property developer Country Garden earned bondholder approval to extend some debt deadlines, averting a potential default.
China is a major market for Europe’s largest companies, and the faltering recovery of its economy has weighed on their bottom lines.
Back in Europe, a whole range of services activity data are due to be released later in the session, which will provide further clues on the region’s economy ahead of a European Central Bank policy meeting next week.
A run of soft eurozone data, particularly out of Germany, Europe’s biggest economy and the region’s major growth driver, has raised the likelihood of the ECB pausing its rate-hiking cycle later this month.
ECB President Christine Lagarde is set to speak later Tuesday, and her comments will be closely followed for clues of further action.
“It will be critical for central banks to keep inflation expectations firmly anchored while these relative price changes play out,” Lagarde said on Monday, noting price swings due to changes in the labor and energy markets as well as geopolitical turmoil.
Oil prices inched lower Tuesday as weak Chinese services activity data pointed to more headwinds for the world’s second largest economy, and largest crude importer.
However, these losses are minimal as traders still await an extension in supply cuts by leading OPEC+ members Saudi Arabia and Russia this week, leading to a further tightening of the market.
By 02:00 ET, the U.S. crude futures traded 0.2% lower at $85.83 a barrel, remaining close to levels last seen in November, while the Brent contract dropped 0.2% to $88.81, near its highest level since late-January.
Additionally, gold futures fell 0.1% to $1,962.60/oz, while EUR/USD traded 0.1% lower at 1.0787.
