European stocks rebounded on Tuesday supported by a rally in mining and telecoms stocks. The euro hit the lowest against the dollar in a month, trading at $1.0746 late Tuesday in New York compared with $1.0826 late Monday as lower-than-expected 0.2% euro-zone inflation in December gave rise to expectations of more stimulus measures by the European Central Bank. The Stoxx Europe 600 index ended 0.6% higher in a choppy session. Germany’s DAX 30 rose 0.3% to 10,310.10 after the biggest daily slide in four months on Monday, and France’s CAC 40 lost 0.3%. Volkswagen sank 4% on news the US Justice Department filed a lawsuit against the German car maker for up to $90 billion, alleging it installed illegal emissions defeat devices in nearly 600,000 diesel-engine vehicles. Today from 09:45 – 10:00 CET final readings for December Services and Composite PMIs for France, Germany and euro-zone will be released. The tentative outlook is neutral. At 10:30 CET December Services PMI will be published in UK. The tentative outlook is positive. And at 11:00 CET November Producer Price Index will be released in euro-zone. The tentative outlook is negative.
Nikkei fell 1% today as yen strengthened against the dollar on increased safe-haven demand after the release of weak Services Purchasing Managers’ Index data in China reinforced concerns that China’s economy is slowing down. The Caixin Services PMI fell to 50.2 in December from 51.2 in November, showing a deceleration in China's services sector growth, which fell to its slowest rate in 17 months.
Oil futures prices are extending losses today after closing lower on Tuesday despite concerns about possible supply disruptions due to rising tensions between Saudi Arabia and lran over the Saudi execution of a Shi'ite cleric. Both February WTI and Brent crude prices fell 2.2% settling at $35.97 and $36.42 a barrel respectively on the New York Mercantile Exchange and London’s ICE Futures exchange. Today at 16:30 CET US Crude Oil Inventories will be released by Energy Information Administration. Analysts’ estimates point to a likely rise in crude oil stockpiles.
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