European Shares Poised For Positive Opening


European stocks are seen opening flat to slightly higher on Tuesday as investors bet on rising interest rates and bring forward expectations for Fed policy tightening.

Fed Governor Lael Brainard said on Monday that labor-market conditions may “soon” warrant a reduction in the pace of the central bank’s bond purchases.

New York Fed President John Williams also noted that moderating bond-buying may soon be warranted.

Fed Chair Jerome Powell is due to appear today with Treasury Secretary Janet Yellen at an oversight hearing on the government’s massive support programs passed to deal with the COVID pandemic.

European Central Bank President Christine Lagarde speaks at the ECB Forum on Central Banking.

Asian stocks traded mixed, with Chinese and Hong Kong markets rising after China’s central bank pledged to ensure a “healthy property market” amid the China Evergrande Group crisis.

China’s industrial profits continued to grow at a slower pace as higher input prices as well as shortage of materials lifted production cost, official data showed earlier in the day. Industrial profits increased 10.1 percent year-on-year in August, following an annual growth of 16.4 percent in July.

Germany’s market research group GfK is scheduled to issue consumer sentiment survey results later in the day. The forward-looking index is seen falling to -1.6 in October from -1.2 in September.

France’s Insee publishes consumer sentiment survey results for September. The index is seen at 100 versus 99 in August.

The dollar rose and the U.S. two-year yield hit an 18-month high amid speculation the Federal Reserve could begin asset tapering as soon as November 2021.

Oil prices extended their rally into the sixth session on fears of a global energy crunch. Gold was little changed while Bitcoin swung between $42,000 and $43,000.

U.S. stocks ended mixed overnight and treasury yields rose as investors looked ahead to speeches from several Fed officials and kept a wary eye on the developments surrounding debt-laden China Evergrande.

In economic news, new orders for durable goods waltzed past analyst expectations, but much of the gain came from a big jump in aircraft orders.

The Dow edged up 0.2 percent, while the S&P 500 eased 0.3 percent and the tech-heavy Nasdaq Composite shed half a percent.

European stocks rose on Monday as investors reacted to the German election results and ECB President Christine Lagarde’s comments that many causes of inflation spike are temporary.

The pan European Stoxx 600 slid 0.2 percent. The German DAX rose 0.3 percent, while France’s CAC 40 index and the U.K.’s FTSE 100 both edged up around 0.2 percent.

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