By Peter Nurse
Investing.com - European stock markets are expected to open lower Tuesday, ahead of the release of key economic activity data for the region which are set to provide direction.
At 02:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.2% lower, CAC 40 futures in France dropped 0.1%, while the FTSE 100 futures contract in the U.K. fell 0.2%.
The main focus during this session will be on the flash PMI data from the Eurozone and the U.K., which are likely to offer investors a guide to the prevailing direction of economic trends in the manufacturing and service sectors.
These numbers will be carefully studied, as they will show how well the Eurozone economy, in particular, is performing after unexpectedly growing in the final quarter of 2022.
“We remain positioned for a sharp loss in growth momentum over the coming months,” said analysts at Bank of America, in a note, expecting the temporary boost to the economy to fade during the second quarter as the full impact of monetary tightening weighs.
There also remains a degree of caution within the markets as Russian President Vladimir Putin is due to make a speech later in the session as his invasion of Ukraine enters a second year.
U.S. President Joe Biden attempted to preempt this address on Monday with a surprise visit to Ukraine, where he offered his support for as long as it takes.
In the corporate sector, HSBC (LON:HSBA) will be in the spotlight after Europe’s largest bank reported a sharp jump in its fourth-quarter profit earlier Tuesday, while also offering a special dividend on the sale of its Canadian business.
BHP (LON:BHPB) recorded a sharp decline in its half-year profit on slowing demand in China and weakening iron ore prices, but the Anglo-Australian miner expressed confidence over the coming months, hoping for a rebound in demand from China, its biggest customer.
Oil prices fell Tuesday, weighed by strength in the U.S. dollar as traders prepare for more economic clues this week towards the path of U.S. monetary policy.
Strong economic data this month has raised expectations that the Federal Reserve will have to hike more than previously expected. This has buoyed the dollar, which makes crude, which is denominated in dollars, more expensive for foreign buyers.
Attention this week will be on the minutes of the Federal Reserve’s February meeting, due on Wednesday, as well as a number of Fed speakers.
By 02:00 ET, U.S. crude futures traded 1% lower at $76.61 a barrel, while the Brent contract fell 1.1% to $83.19.
Additionally, gold futures fell 0.2% to $1,846.15/oz, while EUR/USD traded 0.1% lower at 1.0671.