Title: European Stock Futures Edge Higher; Sentiment Weak on Recession Fears

May 10, 2022 01:57AM ET

By: AnalysisWatch

European stock markets are expected to open marginally higher on Tuesday, recovering somewhat after the previous session's sell-off, but investors remain concerned about the combination of rising interest rates and lower economic growth.

At 2 a.m., the DAX futures in Germany were 0.8% higher, the CAC 40 futures in France were 0.8% higher, and the FTSE 100 futures in the United Kingdom were 0.6% higher.

European stock markets slumped on Monday as the DAX, CAC 40, and FTSE 100 all closed more than 2% lower, while the pan-European STOXX 600 index fell to a two-month low. These regional markets are following the global downtrend as central banks begin to aggressively raise interest rates to fight inflation, leading to growing recession fears.

European markets may make a small attempt at recovery on Tuesday, but a widely watched British Retail Consortium survey released earlier in the session highlighted the extent of the slowdown in growth in the United Kingdom.

The data showed that UK retail sales fell 0.3% year-on-year in April. This is the first decline since January 2021, when the country was in a freeze.

Attention now turns to the release of the much-watched German ZEW Sentiment Index later in the session.

This is expected to have fallen again in April, from a level that was already the lowest since the pandemic began in 2020.

Russia's invasion of Ukraine remains another source of market tension. Russian President Vladimir Putin was silent Monday on plans for an escalation in Ukraine as he marked the Soviet Union's victory over Nazi Germany in World War II, but the fighting continues.