European markets are heading for a positive open Tuesday, reversing negative sentiment in the region, but investors will be keeping a close eye on borrowing costs for a number of core European economies this week as bond yields remain elevated.
The U.K.’s FTSE 100 index is expected to open 4 points higher at 8,226, Germany’s DAX up 106 points at 20,241, France’s CAC up 66 points at 7,472 and Italy’s FTSE MIB up 272 points at 35,082, according to data from IG.
Trading updates are set to come from Ocado, JD Sports, Persimmon and OMV on Tuesday. Lindt & Sprüngli will release its latest earnings.
Major European stock markets fell on Monday amid worries over rising government bond yields and a surging U.S. dollar, with the pan-European Stoxx 600 index seeing most sectors closing in the red.
Euro zone and U.K. government bond yields, as well as U.S. Treasurys, are being closely watched this week after the interest rate on short and long-dated government debt climbed to fresh multi-month highs last week and remained elevated on Monday.
Asia-Pacific markets and U.S. stock futures rose overnight as investors braced themselves for the U.S.’ latest producer price index, which measures wholesale inflation. Economists polled by Dow Jones predict that headline PPI grew 0.4%, while the core figure, which excludes food and energy, rose 0.3%.
The reading comes ahead of the closely followed consumer price index report on Wednesday. Both reports will inform the Federal Reserve’s next move on interest rates.
— CNBC’s Brian Evans contributed to this market summary.