By Peter Nurse
Investing.com - European stock markets are expected to open lower Tuesday, amid ongoing concern that the Ukraine/Russia war will hurt global growth by pushing commodity prices sharply higher.
At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.2% lower, CAC 40 futures in France dropped 1.9% and the FTSE 100 futures contract in the U.K. fell 1.1%.
Talks between Russia and Ukraine to halt the conflict made scant progress on Monday, with Moscow continuing its bombardment of several Ukrainian cities, deepening the humanitarian crisis.
Kyiv has rejected Moscow's offer of possible humanitarian corridors to Russia and Belarus, claiming that Russia violated three previous attempts to create them.
The conflict, and the sanctions the West has levied on Moscow as a result, has pushed oil prices up to 14-year highs, while European gas, nickel, and wheat have also climbed to record levels amid concerns about supply disruptions.
These widespread price rises have put the European Central Bank’s meeting on Thursday firmly into focus as policymakers must now grapple with the prospect of inflation, already at record highs, rising yet further just as a new crisis threatens the economy.
The ECB is due to cut bond buying over the coming quarters, but further big decisions look unlikely with the central bank unlikely to commit to anything given the uncertainty surrounding the impact of the Ukraine conflict.
On the economic data front, Eurozone GDP data for the fourth quarter of last year are expected to show a surge in growth of 4.6% on the year, while data already released show German industrial production rose 2.7% on the month in January, much more than expected.
In corporate news, Estee Lauder (NYSE:EL) will be in the spotlight Tuesday after it announced its decision to suspend all commercial activities in Russia, including closing all its stores in the country.
Oil prices traded higher, remaining near the previous session’s 14-year highs, The latest weekly inventory report from the American Petroleum Institute, an industry group, is due later Tuesday, and follows a drop of just over 6 million barrels last week.
Crude had soared on Monday after the U.S. said it was discussing a ban on Russian oil with its major European allies, but gains dissipated after Germany, the biggest buyer of Russian oil, rejected plans for an energy embargo.
By 2 AM ET, U.S. crude futures traded 2.5% higher at $122.39 a barrel, while the Brent contract rose 3% to $126.90. Both benchmarks hit their highest levels since July 2008 on Monday, with Brent hitting $139.13 a barrel and WTI $130.50.
Additionally, gold futures rose 1.4% to $2,022.90/oz, while EUR/USD traded 0.1% higher at 1.0856.