European stocks may open flat to slightly lower on Tuesday as attention shifts to inflation and interest-rate hikes.
German bund yields rose 8.1 bps overnight after data showed German consumer prices increased at their fastest pace in half a century, strengthening the case for a big, half a percentage point ECB interest rate hike in July and an end to quantitative easing.
Eurozone CPI inflation data is due later in the day, with economists expecting it to hit a new high of 7.7 percent.
Gold slipped, the dollar climbed and U.S. Treasury yields rose sharply to one-week highs after U.S. Federal Reserve Governor Christopher Waller said he expects 50 basis point interest rate hikes to continue until there is substantial reductions in inflation.
Rising energy prices also added to inflation worries, with Brent crude futures crossing $123 a barrel in Asian trade after European Union leaders agreed to embargo most Russian oil imports into the bloc by year-end as part of new sanctions on Moscow.
The embargo covers Russian oil brought in by sea, allowing a temporary exemption for imports delivered by pipeline.
Asian stocks traded mixed after data showed China’s slowdown is moderating.
Elsewhere, Japan’s factories posted a sharp fall in output in April in a worrying sign for the economy.
U.S. markets were closed Monday in observance of Memorial Day. In Europe, stocks advanced as traders took comfort from easing COVID-19 curbs and the announcement of more stimulus measures in China.
The pan European Stoxx 600 rose 0.6 percent. The German DAX climbed 0.8 percent, France’s CAC 40 index gained 0.7 percent and the U.K.’s FTSE 100 inched up 0.2 percent.
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