European stocks open to close as markets are rattled by central banks

LONDON — European stocks are expected to open in mixed territory on Tuesday after sharp declines in global markets on Monday amid fears that central banks will be forced into aggressive monetary policy tightening with inflation remaining high.

The U.K.’s FTSE index is seen opening 23 points higher at 7,226, Germany’s DAX 44 points higher at 13,464, France’s CAC 40 up 7 points at 6,030 and Italy’s FTSE MIB down 9 points at 21,955, according to data from IG.

Global stock markets were sent reeling on Monday, with investors reacting to the potential for more aggressive rate hikes by central banks in Europe and the United States after the latest inflation report.

Fed meets

Against this backdrop, the U.S. Federal Reserve is central to market action this week, with Fed officials meeting on Tuesday and Wednesday to discuss their next monetary policy move.

The Federal Open Market Committee is widely expected to announce at least a 50-basis-point hike on Wednesday, having already raised rates twice this year, though market bets for a 75-basis-point hike have risen in light of Friday’s inflation reading.

The Bank of England‘s Monetary Policy Committee will announce its latest interest rate decision on Thursday. The Bank of JapanSwiss National Bank and Brazil’s BCB also meet this week.

On the data front in Europe on Tuesday, due for release are German inflation figures for May, the U.K. unemployment rate for April, euro area industrial production data for April and Germany’s ZEW index of economic sentiment for June.

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