European stocks are likely to open lower on Tuesday as investors fret about the threat of inflation and rotate away from expensive growth stocks to quality value stocks.
Asian markets succumbed to selling pressure as record high prices for commodities stoked fears of the U.S. Federal Reserve tightening its monetary policy much sooner than expected.
Data showed earlier today that China’s factory gate prices rose in April at the fastest rate in three and a half years, while consumer inflation saw modest gains.
U.S. consumer price inflation data due on Wednesday is expected to show a strong gain in April.
Chicago Federal Reserve President Charles Evans told CNBC on Monday that he would be comfortable if inflation ran a little hot for a while. Governor Lael Brainard will have a chance to reinforce that message later today.
Economic confidence survey data from Germany is due later in the session, headlining a light day for the European economic news. The economic sentiment index is seen at 72 in May versus 70.7 in April.
U.S. stocks fell overnight on worries about accelerating inflation. The Dow hit a record intraday high before finishing 0.1 percent lower, while the S&P 500 fell over 1 percent and the tech-heavy Nasdaq Composite tumbled as much as 2.6 percent after negative analyst comments.
European stocks struggled for direction on Monday as caution set in after recent strong gains. The pan European Stoxx 600 edged up 0.1 percent.
The German DAX and France’s CAC 40 index both closed little changed while the U.K.’s FTSE 100 slipped 0.1 percent.
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