Growing expectations of a divided government after the US midterm elections are supporting US stocks, while Asian markets are clinging stubbornly to hopes that China will ease its tough pandemic restrictions.
Banking stocks may be at the center of attention in Europe on Tuesday after the European Central Bank’s top supervisor, Andrea Enria, said the ECB was carefully reviewing payment plans for eurozone banks as the outlook for the 19-nation currency bloc’s economies weakens.
Some of Europe’s biggest banks posted higher-than-expected profits for the last quarter, boosted by a trading boom in volatile markets and higher interest rates, but they warned of growing risks from the economic slowdown.
Meanwhile, as world leaders and diplomats in opening speeches at the COP27 summit in Egypt framed the fight against climate change as a fight for human survival, the Telegraph newspaper reported that British Prime Minister Rishi Sunak is expected to announce a major natural gas deal with the US after the summit.
EU finance ministers said measures to support euro zone economies against soaring energy prices could complicate fiscal plans for 2023 if extended into the spring, noting the potential impact on higher inflation.
For global markets, the US midterm elections will be the big event to watch.
Nonpartisan election forecasters predict Republicans are likely to pick up about 25 seats in the 435-member House of Representatives, more than enough to secure a majority.
And analysts say Republicans could also pick up the seat they need to take control of the Senate.
Although a decisive result could take days, the focus will clearly be on former US President Donald Trump’s ‘big announcement’ scheduled for November 15 after he hinted he would launch a 2024 ds presidential campaign next week.
Asian shares rose on Tuesday, supported by gains on Wall Street and hopes of an eventual economic reopening in China.
Chart: Closing Times for the 2022 US Election –
Key developments that could impact markets on Tuesday:
Economic data: UK BRC retail sales,
in the retail trade seven eurozone
Bank of England Chief Economist Huw Pill takes part in a debate on “the challenges of global monetary policy”
European results: Deutsche Post, Bayer, Pandora, Porsche
Walt Disney, Wynn Resorts