European stock markets are expected to open lower Tuesday, ahead of the release of the latest PMI data for the region as Covid-19 cases surge.
The main focus Tuesday will be on the release of the flash purchasing managers' index data for the Eurozone later in the session, as this will serve as a guide of how business activity in the region has reacted to the recent surge of Covid cases.
The PMI release for the important German manufacturing sector, a key growth driver for the region, is expected to drop to 56.9 in November from 57.8 the previous month.
This suggests the German economy, the largest in the Eurozone, is likely to lose further momentum in the final three months of the year after gross domestic product expanded by a weaker-than-expected 1.8% quarter-on-quarter from July through September.
On Monday, Austria reintroduced a national lockdown to combat a fresh surge in Covid-19 cases, and German Chancellor Angela Merkel called the situation worse than anything her country has experienced so far, while calling for tighter restrictions.
Market participants will also be digesting the decision by President Joe Biden to reappoint Jerome Powell as chairman of the Federal Reserve. This renomination now heads to the Senate for confirmation, but the tech-heavy Nasdaq Composite and the Treasury market closed sharply lower as investors wagered that he will be more aggressive at tackling inflation than his potential replacement, Fed Governor Lael Brainard, would have been.
In the corporate sector, E.ON (DE:EONGn), Europe's largest operator of energy networks, said Tuesday it is targeting 2-4 billion euros ($2.3-$4.5 billion) in proceeds from asset sales as well as partnerships by 2026, as well as annual savings of 500 million euros.
Crude prices fell Tuesday on growing talk the U.S. will shortly announce a coordinated release of oil from strategic reserves in an attempt to cool elevated prices.
The United States is expected to announce a loan of crude oil from its emergency stockpile on Tuesday, Reuters reported, citing a Biden administration source familiar with the situation.
The likes of India, Japan, South Korea and China, the world’s biggest oil importer, are also expected to join in the release of additional output.