The pan-European Stoxx 600 added 0.3% in early deals, with chemicals climbing 0.9% while oil and gas stocks dropped 0.6%.
The positive start in Europe follows cautiously optimistic sentiment elsewhere. Shares in Asia-Pacific were mostly higher in Tuesday afternoon trade, with Japanese and Australian stocks leading gains regionally, while U.S. stock index futures made modest gains in premarket trade as investors await the Federal Reserve’s two-day policy meeting which starts on Tuesday — a focal point for the markets this week.
The central bank is not expected to take any action however, commentary on interest rates, inflation and the economy could drive market moves and there will be close attention to comments on the Fed’s eventual tapering plans.
Billionaire hedge fund manager Paul Tudor Jones told CNBC on Monday that this Fed meeting could be the most important in Chairman Jerome Powell’s career. Jones also warned that Powell could spark a big sell-off in risk assets if he doesn’t do a good job of signaling a taper.
Investors will also be watching for another inflation gauge released on Tuesday. The Producer Price Index — which measures the prices paid to producers as opposed to prices on the consumer level — is expected to rise 0.5% in May, according to Dow Jones estimates.
Data releases in Europe include U.K. unemployment figures for April, final inflation data for Germany, Italy and France in May and euro zone trade balance data for April. There are no major earnings releases.
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