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STOXX AWAITS U.S. INFLATION DATA (0825 GMT)
European shares are trading slightly higher, gaining some support from expectations U.S. inflation data due later in the day will persuade the Federal Reserve and other central banks to step back from aggressive interest rate hikes.
The pan European STOXX 600 was about flat, with oil producers acting as the largest positive influence, as crude prices rose for a second day after a key pipeline that supplies the U.S. remained shut, just as expectations build that loosening COVID restrictions in China will boost energy demand.
Rate-sensitive tech stocks also rose, while utilities tumbled 1%.
In terms of single stocks, Italy's Banco BPM is up around 4% after Enasarco bought almost 2% of its shares.
UNDER ARREST (0745 GMT)
The arrest of FTX's former CEO Sam Bankman-Fried in the Bahamas at the behest of U.S. prosecutors, just a month after the cryptocurrency exchange filed for bankruptcy, is turning out to be the headline of the day.
And for financial markets caught in a holding pattern, U.S. inflation data due later on Tuesday is shaping up as a key event, probably more important for the outlook than tomorrow's interest rate decision by the Federal Reserve.
Asian stocks were in a wait-and-watch mood on Tuesday while the dollar, which has been lifted by high and rising interest rate expectations, held firm.
In Europe, markets will focus on economic sentiment data from Germany, the region's biggest economy, where the ZEW survey will be released. Inflation data is also due out in Germany.
Investors generally remain on alert to risks of further increases in borrowing costs hurting economies, although central banks are beginning to slow their aggressive rate rises.
Runaway inflation has forced developed economies to raise borrowing costs by a combined 25.15 percentage points this cycle, the most aggressive in decades.
The rate of price increases is beginning to slow in the United States but investors need more evidence to underscore that trend, which could limit any policy shocks from the Fed.
Economists polled by Reuters expect U.S. core inflation to be steady at 0.3% month-on-month but see moderation in the annual pace, with headline prices seen 7.3% higher than a year earlier.
The New York Fed's latest survey showed that Americans expected waning inflation pressures over the next few years even as they expect their incomes to perk up.
Despite the double whammy of double-digit inflation and rising energy costs, travel demand remains strong, with TUI, the world's largest holiday company, setting its sights on strong business in the summer of 2023.
Meanwhile, Britain's National Grid cancelled standby notices for two coal units, a few hours after issuing the requests, as a cold snap gripped the country but high nuclear output and wind speeds reduced the chance of energy shortages.
Key developments that could influence markets on Tuesday:
Economic data: UK Oct labour market, Germany Nov inflation final, Germany Dec ZEW survey
Events: Fed starts 2-day meeting, BoE publishes Financial Stability Report
U.S. data: Nov inflation
EUROPEAN BOURSES SEEN HIGHER AHEAD OF U.S. INFLATION (0739 GMT)
European futures are pointing to a start of the day in positive territory ahead of U.S. inflation data that many hope will persuade the Federal Reserve and other central banks to step back from aggressive interest rate hikes.
Later this week, the Fed, European Central Bank and the Bank of England are all expected to raise rates by 50 basis points (bps), rather than the aggressive 75 bps hikes they went with earlier in the year.
Also supporting sentiment, a Chinese tourism-linked index jumped more than 2% as Hong Kong eased COVID-19 restrictions for inbound travellers.
