European stocks are likely to open lower on Tuesday, as investors weigh the outlook for economic recovery and monetary policy against the threat posed by a fresh coronavirus wave in the United States.
Earlier today, the Bank of Japan lifted its inflation forecast, mainly reflecting a rise in commodity prices amid pandemic uncertainty.
The central bank stressed its resolve to maintain its ultra-loose monetary policy, saying that risks to economic activity are skewed to the downside for the time being, mainly due to the impact of Covid-19.
Central banks in Indonesia, Malaysia, Norway, Turkey, and Ukraine will hand down their policy decisions later this week.
Asian markets slipped in cautious trade, pressured by higher U.S. Treasury yields.
The two-year U.S. yield rose past 1 percent for the first time since February 2020, and the 10-year and 30-year yields also surged as cash trading restarted after Monday’s holiday.
Gold eased on dollar strength while Brent reached the highest level since 2014 amid rising geopolitical tensions in the Middle East.
It’s a busy day ahead on the Eurozone’s economic calendar, with ZEW Economic Sentiment figures for Germany and the Eurozone likely to be in focus.
Across the Atlantic, NY Empire State Manufacturing numbers are due out later in the session.
The focus will remain on earnings, with results from Goldman Sachs Group Inc., Morgan Stanley, Bank of America Corp., UnitedHealth Group Incorporated and Netflix Inc. due throughout the week.
U.S. markets were closed on Monday in observance of the Martin Luther King Jr. Day holiday.
European stocks closed Monday’s session on a firm note, with deal talks and the Chinese central bank’s decision to cut interest rate helping underpin sentiment.
The pan European Stoxx 600 climbed 0.7 percent. The German DAX rose 0.3 percent, France’s CAC 40 index added 0.8 percent and the U.K.’s FTSE 100 jumped 0.9 percent.
European Shares Set For Cautious Start
2022-01-18 05:46:41
