European markets are gearing up for a day filled with economic data following a relatively subdued Asian session marked by renewed concerns about China’s troubled property sector and potential security law tightening in Hong Kong.
The leader of Hong Kong confirmed on Tuesday his plans to introduce new national security laws, building upon the comprehensive legislation imposed by Beijing in 2020. Investors are closely monitoring the situation.
Key economic indicators for the European session include fourth-quarter GDP figures for the euro zone, France, and Germany. Additionally, the financial health of companies, such as Diageo, the producer of Johnnie Walker whisky, will shed light on discretionary spending patterns.
The week holds significance on both macro and corporate fronts, impacting interest rate outlooks and providing insights into company performance. Notable reports this week include those from Microsoft, Alphabet, and AMD, scheduled for later on Tuesday.
While Asian stocks faced downward pressure due to concerns over China Evergrande’s court-ordered liquidation and the broader property market, European futures indicate a positive open, extending the week’s rally. The pan-European STOXX 600 index aims to build on its recent two-year peak, following its strongest weekly performance in three months.
Geopolitical tensions are influencing commodity markets, with oil prices rising and gold attracting safe-haven bids amidst escalating conflicts in the Middle East. The United States has pledged to take “all necessary actions” in response to a drone attack that claimed the lives of three U.S. troops in Jordan.
White House National Security spokesman John Kirby emphasized the U.S.’s desire to avoid a broader war with Iran or the region, stating that they will do what is necessary. Iran denies its involvement in the attacks.
In the corporate sphere, Airbus may experience positive momentum due to ongoing troubles faced by Boeing. Boeing withdrew a request for an exemption that could have expedited the certification process for its upcoming 737 MAX 7.
In other developments, Elon Musk, the billionaire entrepreneur, announced that the first human patient has received an implant from his brain-chip startup Neuralink on Sunday and is reportedly recovering well.
Key events influencing markets on Tuesday include economic releases such as Q4 GDP flash data for the euro zone, France, and Germany, as well as euro zone consumer confidence figures for January. Earnings reports from companies like Diageo, Microsoft, Alphabet, AMD, and Pfizer will also be closely watched.
