European Shares Pressured by Hard Brexit Concerns, Unilever Sales Warning

European shares are under pressure early Tuesday after reaching record levels the previous session as a sales warning from Unilever and worries that Britain’s Prime Minister Boris Johnson could take a hard stance on the transition period for Brexit pressured U.K. stocks. Stocks remained underpinned early in the session by the trade deal between the United States and China, however, investors continued to question the details.

At 10:53 GMT, the U.K.’s FTSE Index is trading 7509.84, down 9.21 or -0.12%. Germany’s DAX Index is at 13275.71, down 135.95 or -0.98% and France’s CAC Index is trading 5957.83, down 33.83 or -0.57%.

UK Prime Minister Johnson Revamps Threats of Hard Brexit

Hanging over the markets is UK Prime Minister Boris Johnson’s revamped threats of a hard Brexit if the European Union (EU) does not agree a free trade agreement by the end of 2020.

With the U.K. set to leave the bloc before January 31, Johnson will use his newly-secured majority in parliament to outlaw any extension to the Brexit transition period beyond the end of 2020, Reuters reported.

The British Pound fell more than 1% on Tuesday after media reports said that the British government will make it illegal for the post-Brexit transition period to be extended, leaving little time for a trade deal to be agreed with the EU.

Local media reported early Tuesday that Johnson will add revision to the Brexit bill (formerly known as the Withdrawal Agreement Bill) that would explicitly rule out any extension to the transition period beyond December 2020. The U.K. is due to leave the EU by January 31, 2020.

The reports have raised concerns that the U.K.’s new, more empowered government under Prime Minister Boris Johnson could be steering the country towards a harder Brexit.

The legislation, if implemented, would leave only 11 months for a trade deal to be struck with the EU and my people think that is not enough time.

Indexes Weaken after Unilever Warning

The broader European equities index came off record highs after consumer goods giant Unilever warned that 2019 sales would grow slightly below its expectations, citing tough trading conditions in West Africa and a slowdown in south Asia.

US Futures Edge Slightly Lower

U.S. futures were supported earlier in the session by a strong performance in Asia, but retreated from their highs after European shares turned lower. U.S. investors are paying attention to the events in the U.K., but their primary worry is the details over the U.S.-China trade deal.