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European Shares Seen Mixed At Open

stockmarkets aug17 15nov22 lt

European stocks may open on a flat note Tuesday, as investors react to weak Chinese data and mixed signals from Federal Reserve officials on the path of U.S. rate increases.

China's factory output grew more slowly than expected in October, retail sales unexpectedly fell for the first time since May and property investment saw its biggest drop in 32 months, suggesting the world's second-largest economy is losing momentum as a result of protracted COVID-19 curbs and a property downturn.

Elsewhere, data showed Japan's economy unexpectedly shrank for the first time in a year in the third quarter.

The dollar and bond yields held firm amid mixed signals coming from Fed officials on their next rate decision.

Gold steadied near a three-month high, while oil held overnight losses after OPEC cut its 2022 global oil demand growth forecast for a fifth time since April.

Asian stocks traded mostly higher, with Chinese and Hong Kong markets rallying on signs of easing Sino-U.S. tensions after a meeting between Xi Jinping and Joe Biden on the sidelines of the G-20 Summit.

China's relaxation of COVID curbs, measures to support the property market and a decision by the People's Bank of China to add liquidity in its financial system via operations of medium-term lending facility and reverse repos also added to the positive sentiment.

Unemployment data from the U.K. and economic confidence figures from Germany are due later in the session, headlining a busy day for the European economic news.

Across the Atlantic, trading may be impacted by reaction to a report on producer price inflation, which could affect the outlook for interest rates.

Former U.S. President Donald Trump plans to make an announcement later today, with analysts expecting him to officially launch another White House bid.

Overnight, U.S. stocks fluctuated before ending firmly in the red as investors reacted to hawkish comments from Fed Governor Christopher Waller, news of planned job cuts at Amazon and the rapid downfall of the once-popular digital-assets exchange FTX.

The Dow slipped 0.6 percent, the tech-heavy Nasdaq Composite lost 1.1 percent and the S&P 500 shed 0.9 percent despite Fed Vice Chair indicating the central bank should soon moderate the size of its interest-rate increases.

European stocks finished broadly higher on Monday after Beijing unveiled a sweeping rescue package to salvage its real estate market.

The pan European Stoxx 600 inched up 0.1 percent. The German DAX rose 0.6 percent, France's CAC 40 index edged up 0.2 percent and the U.K.'s FTSE 100 gained 0.9 percent.

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