European stocks, euro extend losses on political turmoil

LONDON, June 11 (AFP): European equities and the euro extended a sell-off Tuesday, fuelled by EU political uncertainty, while Asian markets also took a hit as investors looked ahead to inflation data and an interest rate decision in the United States.
Investors were "carefully assessing the impact of right-wing parties' success in the European Union and its potential effects on the bloc's unity", said Tickmill Group analyst Patrick Munnelly.
Far-right parties performed well in weekend EU Parliament elections, prompting French President Emmanuel Macron to call a snap parliamentary vote and sparking political turmoil in his country.
Ratings agency Moody's has warned that Macron's move could lower France's credit score because it raises the risk of "political instability".
Traders were looking ahead to US inflation data and the outcome of the Federal Reserve's latest monetary policy meeting, both due Wednesday.
While decision-makers are expected to keep borrowing costs on hold, the inflation numbers could provide clues on when the Fed could start cutting rates.
Wall Street pushed higher Monday, with the S&P 500 and Nasdaq once again chalking up record highs.
But Asian investors were less assured Tuesday, after a tepid start to the week in holiday-thinned trade.
Speculation has been swirling about how many, if any, interest rate cuts the Fed will introduce this year, with several officials warning they are reluctant to move too soon for fear of restoking inflation, which remains stubbornly above its target of two percent.
Traders started the year predicting as many as six cuts but have whittled them down since then, and now the most optimistic estimate is for three, with some even eyeing zero.
Elsewhere Tuesday, oil prices fell as traders awaited demand forecasts from OPEC.