BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening lower on Monday against the backdrop of heightened Middle East tensions.
U.S. President Donald Trump issued a threat to impose sanctions on Iraq and retaliate against Iran if it strikes back after the killing of its top commander.
The threat against Iraq, the second largest producer among the OPEC, comes after its parliament voted in favor of a resolution calling for an end to the foreign military presence in the country, including the estimated 5,200 U.S. troops stationed to help fight Islamic State extremists.
Iran announced Sunday it would no longer abide by the limits contained in the 2015 nuclear deal while reports from Baghdad say the U.S. embassy compound there was targeted in an attack on Sunday evening.
Asian markets are trading mostly lower despite reports that Chinese officials plan to visit Washington next week for the signing of a trade deal with President Donald Trump.
The dollar held steady, while spot gold jumped 1.7 percent to reach its highest level since April 2013. Oil prices rose over 2 percent in Asian trading to hover near four-month highs.
In economic releases, final composite Purchasing managers' survey data from euro area is due later in the session, headlining a busy day for the European economic news.
Eurozone Sentix investor confidence data is due. The euro area sentiment index is expected to rise to 2.5 in January from 0.7 in December.
Across the Atlantic, the Labor Department's monthly jobs report as well as reports on the U.S. trade deficit, service sector activity and factory orders may attract some attention this week.
U.S. stocks fell on Friday as tensions flared up in the Middle East and data showed that U.S. manufacturing activity unexpectedly contracted at a faster rate in December. Energy stocks surged after West Texas oil at one point rallied almost 5 percent.
The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite dropped around 0.8 percent while the S&P 500 shed 0.7 percent.
European markets closed Friday's session lower after a U.S. airstrike killed Iranian military leader Qassem Soleimani and Iranian leader Ayatollah Ali Khamenei said there would be 'revenge' for Soleimani's death.
The pan European Stoxx 600 eased 0.3 percent. The German DAX lost 1.3 percent while France's CAC 40 index finished marginally higher and the U.K.'s FTSE 100 edged up 0.2 percent.
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