"PMI Weakness and Election Uncertainty in Spain Impact Sentiment"
Weak business activity data in Germany and an inconclusive election result in Spain weighed on sentiment in European markets, causing world stocks to slip. The German Flash Composite Purchasing Managers' Index (PMI) showed a contraction in business activity, increasing the likelihood of a recession in the second half of the year. The euro slipped against the dollar, government bond yields in the euro area fell, and European stock markets dipped. With central bank meetings scheduled for the week, caution set in among investors. Spain faced political gridlock after the right-wing parties failed to secure a decisive victory in the national election, leaving small regional parties as potential kingmakers. Major Spanish lenders saw their shares decline. Investors also braced for a slew of earnings reports from major companies.