European equities moved higher on Tuesday, supported by gains on Wall Street overnight and ahead of the release of the latest regional economic activity data.
At 07:05 GMT, Germany’s DAX rose 0.3%, France’s CAC 40 climbed 0.4%, and the U.K.’s FTSE 100 added 0.2%.
Powell Speech in Focus
Global markets retained a positive tone after Monday’s Wall Street rally, following last week’s Federal Reserve interest rate cut and with investors anticipating further easing from the U.S. central bank’s remaining meetings this year.
New Fed Governor Stephen Miran, appointed by President Donald Trump, called for large rate cuts on Monday. Futures markets imply roughly a 90% chance of a quarter-point rate cut in October, and a 75% probability of additional easing in December.
Other Fed speakers scheduled for Tuesday include Raphael Bostic and Michelle Bowman, but market attention will primarily be on comments from Fed Chair Jerome Powell later in the session. These remarks are expected to be pivotal for near-term investor sentiment.
Eurozone PMIs Awaited
In Europe, focus turns to the flash PMIs for September, which will indicate whether the eurozone economy is maintaining resilience amid U.S. tariffs. The releases are expected to remain above the key 50.0 threshold separating expansion from contraction, though only marginally.
U.S. PMI data is also scheduled later, with forecasts pointing to a moderate slowdown in economic growth.
Burberry Recovery “Overpriced” – Jefferies
In corporate news, Burberry (LSE: BRBY) returns to London’s FTSE 100 on Monday, one year after leaving the top-tier index, ahead of its latest collection at London Fashion Week.
Jefferies, however, warned that expectations of a rapid turnaround at the luxury brand are “overpriced,” reiterating its “underperform” rating and citing potential downside of around 40%. The brokerage highlighted that optimism about Burberry’s ability to restore profit margins is facing a critical test.
“The emergence of broadly unchanged sales productivity in Q2, despite all the right commercial steps having been undertaken, would weaken the bullish narrative as H2 profit delivery demands a clear acceleration in momentum,” Jefferies said.
Oil Falls on Oversupply Concerns
Oil prices slipped Tuesday amid ongoing oversupply worries, following a preliminary agreement between Iraq and Kurdish regional governments to restart an oil pipeline.
At 03:05 ET, Brent futures dropped 0.7% to $66.14 a barrel, while U.S. West Texas Intermediate crude fell 0.6% to $61.89 a barrel, marking a five-session losing streak for both contracts.
Reuters reported that Iraq’s federal and Kurdish regional governments reached a deal with oil companies to resume crude exports via Turkey on Monday, potentially restoring around 230,000 barrels per day, which had been halted since March 2023.
The International Energy Agency’s latest monthly report indicated that global oil supply will increase more quickly this year, and a surplus could expand in 2026 as OPEC+ production rises and supply from non-OPEC sources grows.
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