Investing.com – European stock markets traded mixed on Tuesday, with UK markets returning from a hiatus as investors awaited key inflation data on both sides of the Atlantic for clues about future monetary policy.
At 03:10 ET (07:10 GMT), shares in Germany were trading 0.2% higher, while those in France were down 0.1% and those in Britain were down 0.1%.
Key inflation data in focus
The FTSE 100 underperformed on Tuesday after UK markets returned from Monday’s late May bank holiday, but sentiment is generally positive after dovish comments from a range of ECB officials.
The European Central Bank has plenty of room for rate cuts and current market expectations for long-term easing are reasonable, ECB policymaker Francois Villeroy de Galhau said in a newspaper interview on Monday.
The country has all but guaranteed a rate cut in June, but uncertainty about what comes next remains.
The central bank will cut rates slower or faster depending on the strength of underlying inflation and demand, ECB chief economist Philip Lane said on Monday.
With this in mind, the latest release is expected on Friday and is expected to rise 2.5% year-on-year in May, up from 2.4% in April, while underlying inflation remains stable at 2.7%.
On the other hand, the Fed’s favorite inflation gauge also comes out on Friday and will be closely watched for clues about the direction of interest rates over the rest of the year.
Investors will also have the opportunity to hear from several Fed speakers throughout the week, including the Governor, the President of the Cleveland Fed, the Governor, the President of the New York Fed and the President of the Atlanta Fed.
The flows to Europe are increasing
The corporate earnings season largely ended on Tuesday, with few results scheduled.
There has been an increase in capital flows into European equities in recent weeks, Goldman Sachs analysts said in a note.
Europe has been the least favored region in terms of long-only flows in recent years, with cumulative net inflows approaching zero since 2020.
“We think there is room for flows to pick up,” Goldman added.
Crude oil is recovering ahead of the OPEC+ meeting
Crude oil prices headed higher on Tuesday after recovering from recent losses ahead of a meeting of major producers to determine future levels.
At 3:10 AM ET, futures (WTI) were trading 0.2% higher at $78.70 per barrel, while the contract was trading largely unchanged at $82.85 per barrel.
Oil prices rose more than 1% in subdued trading on Monday due to holidays in Britain and the US, after falling to the lowest level since early February last week.
All eyes are now on the next meeting of the Organization of the Petroleum Exporting Countries and allies, collectively called OPEC+, which will take place online on June 2.
The focus will be squarely on whether the cartel will continue its current voluntary production cuts of 2.2 million barrels per day into the second half of the year.
Moreover, the price fell 0.4% to $2,344.25/oz, while trading 0.2% higher at 1.0875.
