- Obama tells Republicans to lift "threats"
- Obama to announce Yellen as Fed Chair
- Fed to release meeting minutes
- UK and German industrial production data
FTSE 100: -0.26%
CAC 40: -0.24%
FTSE MIB: 0.31%
IBEX 35: 0.27%
Stoxx 600: -0.34%
European stocks were little changed after the US government failed to make any headway on debt ceiling talks.
President Barack Obama has told Republicans they need to lift "threats" against the economy before he will hold budget talks with the opposition.
The US is in its second week of a shutdown after Congress missed last Monday's deadline to pass a budget bill.
Republicans have been pushing for a delay to Obama's controversial health bill but Democrats are holding their ground.
In his weekly address on Tuesday, Obama said Republicans "don't get to demand ransom in exchange for doing their jobs".
"There's only one way out of this reckless and damaging shutdown: pass a budget that funds our government, with no partisan strings attached," he said.
The government has until October 17th before reaching its $16.7trn debt ceiling and running of cash to pay its bills. It could see the nation default on its debt, which would send shock waves throughout the rest of the world.
The International Monetary Fund warned of the consequences of the government deadlock in its World Economic Outlook yesterday, saying it would derail US recovery and lead to disruptions in financial markets across the globe.
At the same time it cut its forecast for global economic growth to 2.9% for this year, down 0.3% from the July estimate.
Also making headlines in the US yesterday was news that Obama will nominate Janet Yellen, Vice Chairman of the Federal Reserve, for the position of Chair, replacing Ben Bernanke next year.
Obama will announce the nomination at 15:00 in Washington, White House officials told Bloomberg in an emailed statement.
"This is generally seen as a positive appointment for financial markets as Yellen is widely regarded as even more dovish than Bernanke, which could help prolong the Fed's asset purchases well into next year," according to Craig Erlam, Market Analyst at Alpari.
The Federal Reserve will later today release minutes from last month's policy meeting when it shocked investors with its decision to keep its stimulus measures and interest rate unchanged. The minutes will shed further light on who was for or against the move.
Industrial production data
UK industrial output in August fell 0.7% year-on-year in August, compared to a 1.6% decline in July, according to consensus ahead of the release of the report today.
Manufacturing activity, on the other hand, is expected to rise 1% in August, up from a 0.7% drop in the previous month.
Britain's latest trade balance statistics will also be released, with analysts predicting a deficit of £2,050m in August after £3,085m in July.
The data will come a day ahead of the Bank of England's interest rate decision, when the central bank is likely to turn to data to analyse the progress of the UK's economic recovery.
In the Eurozone, German industrial production figures will also be unveiled.
RBS to pass on trader chats to FCA
Royal Bank of Scotland's shares
fell after a Bloomberg report said the lender passed records of instant messages to UK regulator, the Financial Conduct Authority (FCA), after concluding that a former currency trader's communications with counterparts at other firms may have been inappropriate.
Telecom Italia declined after Moody's Investors Service cut its credit rating to junk status due to the telecommunications company's mounting debt.
PSA Peugeot Citroen advanced following news China's Dongfeng Motor Corp. will buy a stake in the European carmaker for 10bn yuan.