European stocks are seen opening a tad higher on Tuesday after Fed officials said they want to avoid unnecessarily disrupting the U.S. economy.
Kansas City Fed President Esther George said a big reduction in the balance sheet could allow the Fed to pursue a less aggressive strategy on short-term interest rates.
Separately, San Francisco Fed chief Mary Daly said policy moves “have to be gradual and not disruptive.”
Asian markets were broadly higher in thin trade, with Chinese, Hong Kong and Seoul markets closed for the Chinese New Year break.
A pullback in the dollar index from multi-month highs helped gold push higher, while oil prices climbed amid supply shortages and geopolitical tensions.
The Australian dollar slumped after the country’s central bank vowed to remain patient about raising interest rates.
Traders now look ahead to the upcoming monetary policy meetings of the Bank of England and the European Central Bank as well as the U.S. Labor Department’s closely watched monthly jobs report due on Friday for more clues on the outlook for monetary policy.
The strength of the monthly jobs data could impact expectations regarding how fast the Federal Reserve will raise rates from near-zero levels in an effort to fight inflation.
Trading later in the day may be impacted by reaction to reports on retail sales, unemployment and final manufacturing Purchasing Managers’ survey results from Germany.
Across the Atlantic, readings on manufacturing activity, construction spending and job openings are due.
U.S. stocks ended the last trading day of January on a high note but still chalked up the worst month since March 2020.
Markets surged for a second day as traders continued to pick up tech stocks at reduced levels following positive analyst comments.
The tech-heavy Nasdaq Composite rallied as much as 3.4 percent, while the Dow rose 1.2 percent and the S&P 500 added 1.9 percent.
European stocks also moved to the upside on Monday, with tech and energy stocks leading the surge.
The pan European Stoxx 600 gained 0.7 percent. The German DAX added 1 percent and France’s CAC 40 index rose half a percent while the U.K.’s FTSE ended flat with a negative bias.
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