Europe open: G-20 warning, RyanAir troubles weigh on sentiment

Shares on the Continent have begun the morning trading lower, after G-20 finance ministers warned at the weekend that global economic growth was becoming less synchronised and that downside risks over the short to medium-term had risen, although they added that it remained strong.

Capturing the mood in markets, analysts at Rabobank mused: "The G-20 summit over the weekend saw a communique that global trade tensions threaten growth. Luckily, US Treasury Secretary Mnuchin also stated that there is “light at the end of the tunnel.” Perhaps there is. And perhaps that light is a train coming towards us."

As of 0916 BST, the benchmark Stoxx 600 was slipping by 0.28% or 1.08 points to 384.54, alongside a 0.15% or 18.73 point fall for the German Dax to 12,542.69 and a slide of 0.48% or 26.18 points to 5,372.14 for the French Cac-40.

On Sunday, G-20 finance ministers had failed to agree on how to tackle the multiple disagreements between participants over US trade tarrifs.

More positively, speaking on the sidelines of the G-20 finance ministers' meeting on Sunday, US Treasury Secretary, Steve Mnuchin, told Bloomberg News there was "no" chance of a currency war.

Nevertheless, investors were on their guard, especially in the wake of the recent weakening of the Chinese yuan, although on Monday it strengthened slightly, giving markets a bit of a breather.

Also weighing on sentiment was the US President's criticism of his country's central bank and accusations of currency manipulation against China and the euro area, both last Friday as well.

Bond yields snap higher

Government bond yields were moving higher too, further dampening risk appetite, after it was reported that the Bank of Japan might be mulling tweaking its monetary policy.

The yield on the benchmark 10-year German government bond was up by four basis points at 0.35%, mimicking a similar rise in US bond yield during the previous session on the back of reports that the BoJ was studying making some changes to its policy of keeping longer-term government bond yields capped, so as to make the policy more sustainable.

Against that backdrop, investors were waiting on a meeting between Donald Trump and European Commission chief, Jean Claude Juncker, on Wednesday, that analysts at UniCredit said might prove to be the most important risk event of the whole week, more so than the European Central Bank's policy meeting scheduled for Wednesday or a preliminary reading on US second quarter GDP growth, next Friday.

The data calendar was light on Monday, with only the European Commission preliminary reading on Eurozone consumer sentiment for July set for release.

Later in the session, albeit after the close of trading in London, the spotlight was expected to be on the latest quarterly results from America's Alphabet.

A reading on new US home sales in June was also set for release, at 1500 BST.

Ryan Air hits heavy turbulence

Shares in RyanAir, Europe's largest carrier, were a standout faller after the company reported a 20% drop in first quarter profits.

Although management at the Irish discount airline stood by its full-year guidance, it said its outlook was "heavily dependent" on how it fared in the third quarter, as well as strikes by cabin crews and air traffic controllers.

Commenting on the company's quandry, Mike van Dulken at Accendo Markets said: "A downbeat outlook message from Ryanair on Q2 pricing, zero H2 visibility, higher fuel costs, the risk of more disruption (ATC and crew strikes) and, of course, Brexit is weighing on both it and peers."