Stock Market

European stock futures are going down; PMI data will show the way.

European stock markets are likely to open down on Tuesday, before important economic data for the region comes out and gives the markets direction.

At 02:00 ET (07:00 GMT), the DAX futures contract in Germany was down 0.2%, the CAC 40 futures contract in France was down 0.1%, and the FTSE 100 futures contract in the U.K. was down 0.2%.

The main focus of this session will be on the flash PMI data from the Eurozone and the U.K., which is likely to give investors an idea of the direction of economic trends in the manufacturing and service sectors.

These numbers will be carefully looked at because they will show how well the economy of the Eurozone is doing after growing in a way that no one expected in the last quarter of 2022.

In a note, analysts at Bank of America said, “We remain positioned for a sharp loss of growth momentum in the coming months.” They expect the temporary boost to the economy to fade during the second quarter as the full effects of monetary tightening weigh in.

The markets are also still a little bit cautious because Russian President Vladimir Putin is going to give a speech later in the session. Putin’s invasion of Ukraine is now in its second year, so the markets are worried about what he might say.

On Monday, U.S. President Joe Biden tried to get ahead of this speech by making an unexpected trip to Ukraine. There, he offered his help for as long as it takes.

In the business world, HSBC (LON:HSBA) will get a lot of attention after Europe’s biggest bank reported a big jump in its fourth-quarter profit and a special dividend on the sale of its Canadian business.

BHP (LON:BHPB) saw a big drop in its half-year profit because demand in China was slowing and iron ore prices were going down. However, the Anglo-Australian miner said it was optimistic about the next few months and hoped that demand from China, its biggest customer, would go up again.

Oil prices went down on Tuesday because the U.S. dollar got stronger. Traders are getting ready for more economic clues this week about the future of U.S. monetary policy, so they are watching the dollar.

This month’s strong economic data has made people think that the Federal Reserve will have to raise interest rates more than they thought before. This has made the dollar stronger, which makes it more expensive for foreigners to buy crude oil, which is priced in dollars.

This week, people will be paying attention to the minutes from the Federal Reserve’s meeting in February, which are due on Wednesday, as well as to a few Fed speakers.

By 02:00 ET, U.S. crude futures were down 1% to $76.61 per barrel, while the Brent contract was down 1.1% to $83.19.

Also, gold futures dropped 0.2% to $1,846.15/oz, and EUR/USD fell 0.1% to 1.0671.


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