European Shares Seen Opening Up Ahead Of US CPI Data

(RTTNews) - European stocks are likely to open higher on Tuesday as investors await key U.S. consumer price inflation data later in the day for clues on the path for interest rates.

The consumer price index is expected to have risen by 6 percent year-over-year in February compared to 6.4 percent in January.

Traders shifted back to betting Fed rate cuts amid the fallout from SVB and lingering worries about contagion.

Some economists now expect no rate increase at all when the Federal Reserve delivers its interest-rate decision later this month.

Rate hike expectations for the ECB this week and the BOE next week have also been pared.

The labor market statistics from the U.K. and industrial production data from Italy are the major statistical reports due later in the session.

Asian markets fell broadly, while the dollar index rose slightly after hitting a one-month low the previous day. Bond yields also rebounded a little bit, pulling gold prices lower to around $1,900 per ounce.

Oil prices fell more than 1 percent to extend recent losses as the collapse of Silicon Valley Bank unleashed recession fears.

U.S. stocks recovered from an early slide to end mixed overnight while the dollar fell for a fifth day running and two-year Treasury yields saw their biggest drop since 1987 amid bets that the debacle in the banking sector could cause the Federal Reserve to pause interest rate hikes.

The Dow slipped 0.3 percent and the S&P 500 eased 0.2 percent while the tech-heavy Nasdaq Composite rose half a percent.

European stocks logged their steepest single day decline this year on Monday as bank stocks across the continent sank on fears that the collapse of Silicon Valley Bank could spark contagion.

The pan European STOXX 600 lost 2.4 percent. The German DAX plunged 3 percent to hit a new one-month low, while France's CAC 40 index slumped 2.9 percent and the U.K.'s FTSE 100 shed 2.6 percent.