The pan-European Stoxx 600 fell 0.1% in early trade
Overnight, Wall Street benchmarks extended gains to notch fresh all-time highs as investors get ready for corporate earnings season to get underway. The S&P 500 index and the Dow Jones Industrial Average rose 0.35% each while the Nasdaq Composite gained 0.21%.
Asian equities were mostly higher on Tuesday, with Sydney’s S&P/ASX 200 bucking the trend to finish just 0.02% lower. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1%, its best daily gain since late June. The Shanghai Composite Index added 0.53%, buoyed by better than expected Chinese export data.
In Europe, however, equities opened mostly lower, as French and German data indicated too modest rises in inflation last month. German CPI rose 2.3% year-over-year in line with expectations and the same as the prior period. The pan-European Stoxx 600 fell 0.1% in early trade. U.S. stocks were set for a mixed open as the market awaits U.S. inflation data. Consumer prices are expected to tick marginally lower from last month.
Meanwhile, the dollar is mostly higher on Tuesday, with traders shifting focus to the US CPI data due later today. If the numbers fuel fresh demand for the greenback, the euro could threaten the 1.1800 handle. EURUSD failed to overcome the 1.1880 hurdle earlier in the day to turn negative early in Europe. If the pair fails to hold above the 1.1830 region, the market focus would shift towards 1.1800.
Market participants are also nervous ahead of a testimony by Federal Reserve Chair Jerome Powell, which will be scrutinized for any hints at the timing of potential U.S. tapering.
