European stocks mixed; German industrial production disappoints

Investing.com - European stock markets traded in a mixed fashion Tuesday, as investors digested weak German economic data as well as a positive overnight close on Wall Street. 

At 03:05 ET (08:05 GMT), the DAX index in Germany traded marginally lower, the CAC 40 in France traded up 0.1% and the FTSE 100 in the U.K. rose 0.3%.

German industrial production weakens

Data released earlier Tuesday showed that German industrial production unexpectedly fell by 0.7% in November on a month-on-month basis, marking the sixth monthly decline in a row.

The German economy, Europe's biggest, was the weakest among its large eurozone peers last year, as high energy costs, shaky global orders and record-high interest rates took their toll. 

Dovish Fedspeak boosts sentiment

However, despite this unwelcome news, European equity markets have received a positive handover from Asia, helped by overnight gains on Wall Street.

Sentiment was helped by relatively dovish Fedspeak, with Governor Michelle Bowman calling monetary policy as "sufficiently restrictive" and Atlanta Fed President Raphael Bostic repeating his view that rate cuts are likely this year.

Additionally, the New York Fed's latest Survey of Consumer Expectations showed that U.S. consumers' projection of inflation over the short run fell to the lowest level in nearly three years in December.

The main focus this week will be on Thursday's U.S. CPI, as this could shift expectations over where the Federal Reserve is heading in terms of interest rate movements.

Earlier Tuesday, core inflation in Japan's capital slowed for the second straight month in December, rising 2.1% from a year earlier, after a 2.3% rise in November and matched a low hit in June 2022. 

Munich Re details cost of natural disasters

In the corporate sector, Munich Re (ETR:MUVGn) stock rose 0.1% after the German insurance giant reported that earthquakes in Turkey and Syria, storms in the United States and other natural disasters caused an estimated $95 billion in insured losses in 2023, down from the previous year.

GSK (LON:GSK) stock rose 0.4% after the British drugmaker said it would acquire Aiolos Bio for a $1 billion upfront payment and up to $400 million in certain success-based regulatory milestone payments.

The new U.S. earnings season starts in earnest later this week, with the major U.S. banks, JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC) and Citigroup (NYSE:C), due to report fourth quarter and full-year results on Friday.

Crude rebounds after sharp losses

Oil prices edged higher Tuesday, rebounding after the previous session’s sharp losses, as traders digested concerns over sluggish demand as well as Middle East tensions.

By 03:05 ET, the U.S. crude futures traded 0.6% higher at $71.19 a barrel, while the Brent contract climbed 0.7% to $76.67 a barrel.

Both crude benchmarks had fallen over 3% on Monday as sharp price cuts by top exporter Saudi Arabia had raised worries about slowing crude demand, particularly from major Asian consumers.

However, the ongoing conflict between Israel and Hamas, and the worry that this could grow into a regional crisis that could disrupt Middle Eastern oil supplies, remains an underlying support for the crude market.

Additionally, gold futures rose 0.3% to $2,039.85/oz, while EUR/USD traded 0.1% higher at 1.0950.