By Peter Nurse
Investing.com - European stock markets are set to open in a mixed fashion Tuesday, with cautious trading likely given the fraught relationship between the U.S. and China and the civil unrest throughout America.
At 2:00 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.3% lower, underperforming its rival indices. France's CAC 40 futures were up 0.6%, while the FTSE 100 futures contract in the U.K. rose 0.3%.
Investors are having to balance cautious optimism about the reopening of the global economy, after the social distancing measures that were taken to combat the Covid-19 pandemic, against heightened tensions between the U.S. and China and civil unrest in Hong Kong and the U.S., in particular.
Earlier Tuesday, Australia’s central bank kept its interest rate and yield objectives unchanged amid early signs of a recovery. “It is possible that the depth of the downturn will be less than earlier expected,” Reserve Bank of Australia Governor Philip Lowe said in a statement.
That followed stronger than expected economic data from the U.S. on Monday, with the Institute for Supply Management's purchasing managers' index showing the contraction of factory activity was slowing.
That said, Sino-U.S. tensions remain strained, with China ordering state-owned firms to halt purchases of U.S. soybeans and pork in retaliation for President Donald Trump's announcement that he would end special treatment for Hong Kong.
Additionally, investors’ nerves will be stretched after U.S. President Donald Trump threatened on Monday to use force to quell the ongoing protests in dozens of U.S. cities over the death of George Floyd.
Also of interest Tuesday, British and EU negotiators will begin their fourth and final scheduled round of Brexit trade talks.
In corporate news Tuesday, Carrefour (PA:CARR) has accelerated its expansion into Taiwan, with the French retail giant entering into an agreement to acquire Wellcome Taiwan.
Seadrill (OL:SDRL) has written down the value of its oil drilling rigs by $1.2 billion and hired bankers and lawyers to evaluate a financial restructuring that could allow the company to reduce its $7.4 billion debt.
Oil prices edged higher Tuesday, with traders expecting the Organization of the Petroleum Exporting Countries and its allies, a grouping known as OPEC+, to bring forward its next meeting to later this week in order to discuss whether to extend record production cuts beyond end-June.
The American Petroleum Institute will issue its measure of U.S. oil inventories after the bell. Last week the API reported that crude stockpiles climbed by 8.7 million barrels, bucking the recent downward trend.
At 2:00 AM ET, U.S. crude futures traded 0.6% higher at $35.66 a barrel. The international benchmark Brent contract rose 0.8% to $38.62.
Elsewhere, gold futures fell 0.1% to $1,749.50/oz, while EUR/USD traded at 1.1135, flat on the day.