European stock markets are expected to open largely higher Tuesday, as investors digest more corporate earnings ahead of the release of key regional growth and inflation data, overshadowing disappointing Chinese activity data.
At 02:20 ET (07:20 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.3% and the FTSE 100 futures contract in the U.K. traded largely unchanged.
Eurozone growth, inflation data due
Investors will have the opportunity to study the latest eurozone growth and inflation data later in the session, as they look for clues of future European Central Bank monetary policy decisions.
Gross domestic product is expected to grow by just 0.2% on an annual basis in the third quarter, a drop from 0.5% growth the prior quarter, while consumer prices are seen rising 3.1% annually in October, a drop from 4.3% the previous month.
French GDP grew 0.1% on the quarter, data showed earlier Tuesday, showing annual growth of 0.7%, while German retail sales slumped 0.8% on the month in September, an annual drop of 4.3%.
Chinese activity data disappoints
Sentiment was hit earlier Tuesday by the release by weaker than expected Chinese purchasing managers’ indices, denting hopes a recovery in the world’s second largest economy, however fragile, was underway.
China’s official manufacturing purchasing managers’ index fell to 49.5 in October from 50.2, dipping back below the 50-point level demarcating contraction from expansion.
The non-manufacturing PMI also fell to 50.6 last from 51.7 in September, indicating a slowdown in activity in the vast service sector and construction.
Chinese policymakers have unveiled a raft of measures over the last few months in an attempt to boost the economy after a rapid loss of momentum following a brief post-COVID rebound.
The country’s third-quarter gross domestic product rose 4.9%, data showed earlier this month. This was more than expected, raising tentative hopes of a recovery.
BOJ holds interest rates at low levels
Trading ranges are likely to be limited ahead of Wednesday’s Federal Reserve meeting, given the likely significance of this decision.
Earlier Tuesday, the Bank of Japan held interest rates at ultra-low levels and slightly altered the rhetoric around its yield curve control policy, saying it will use the upper end of its YCC band, a range of -1% to 1%, as a reference cap for its market operations.
AB Inbev reports healthy sales growth
In corporate news, Anheuser Busch Inbev (EBR:ABI), the world’s largest brewer, reported third-quarter sales growth that was slightly better than expected, as pricing boosted revenue and helped offset lower volumes of beer sold.
Thales (EPA:TCFP) posted a 7.5% underlying rise in nine-month revenues, with Europe’s largest defence electronics maker benefiting from resurgent demand for jetliner components and military equipment.
Crude rebounds after sharp fall
Oil prices edged higher Tuesday, rebounding after a bruising session, although weaker-than-expected activity data from China limited the gains on fears of slowing fuel demand from the world’s largest crude importer.
By 02:20 ET, the U.S. crude futures traded 0.6% higher at $82.83 a barrel, while the Brent contract climbed 0.6% to $86.86 a barrel.
The market slumped nearly 3% on Monday despite Israel stepping up its ground assault on Gaza, as traders chose to bank recent profits ahead of a string of key economic events this week, most notably a Fed decision on interest rates this Wednesday.
Events in the Middle East remain in focus, with traders wary of the conflict between Israel and Hamas expanding into a wider regional war in this oil-rich region.
