Title: European Stocks Open Higher as Talks Progress, Oil Slides Ahead of Fed

Mar 16, 2022 04:24AM ET

By: AnalysisWatch

European share markets started on a higher note on Tuesday as there were further indications of advances in the Ukraine-Russia peace talks, which also provided much-needed relief to global oil markets.

The sentiment was also boosted by a sharp turnaround in China's share markets, which soared after verbal interference from the central bank and the government, which pledged to keep the share market stable and support the economy.

At 4:20 AM ET, the Euro Stoxx 50 was higher by 100 points, or 2.7 percent, while the broader Stoxx 600 was higher by 2.1 percent. The largest gainer among the major markets was France's CAC 40, up 2.6%, while the FTSE 100 underperformed with a rise of just 1.6%.

Late on Tuesday, Ukrainian presidential adviser Mikhaylo Podolyak alleged that Ukrainian forces had started a counter-offensive in several regions. Unconfirmed video footage from Wednesday reportedly revealed 15 destroyed or damaged Russian helicopters at an airbase just outside Kherson.

Away from the battlefield, the day is likely to be monopolized by the US Federal Reserve meeting and Chairman Jerome Powell's subsequent press conference. A first-rate hike in almost four years is seen as all but certain, making Powell's guidance the key variable.

Early US retail sales data for February is likely to dominate early trading ahead of the Fed meeting.

Elsewhere, traders will be looking nervously at the Russian bond market as some big interest payments in dollars and euros are due that day. In reaction to Western sanctions, the Kremlin has passed a law allowing it to service foreign debt in roubles, which is expected to be seen as a default by rating agencies and bondholders.

Nonetheless, the rouble rose by almost 2%, alluding to the ongoing peace negotiations.