European markets head for subdued open ahead of key euro zone data

LONDON — European stocks are expected to open lower on Tuesday as markets look ahead to the latest purchasing manager’s index (PMI) data for the euro zone.

The U.K.’s FTSE index is seen opening 14 points lower at 7,241, Germany’s DAX 52 points lower at 16,063, France’s CAC 40 down 21 points at 7,084 and Italy’s FTSE MIB 108 points lower at 27,274, according to data from IG.

European market attention on Tuesday will be focused on flash PMI data for the euro zone in November. The data will be the latest indication of the region’s economic health as Covid cases surge in the region.

On Monday, Germany’s Health Minister Jens Spahn warned that “probably by the end of this winter, pretty much everyone in Germany will be vaccinated, recovered or dead … That’s the reality,” he told a press conference. Germany is considering whether to implement stricter Covid measures and perhaps a partial lockdown like its neighbor, the Netherlands. Germany has one of the lowest vaccination rates in western Europe.

Market participants will also be digesting the announcement Monday that Federal Reserve Chair Jerome Powell was picked for a second four-year term to lead the central bank by President Joe Biden.

The move has driven expectations that the central bank will stay on its monetary path as the economy recovers from the pandemic and attempts to combat inflation.  Biden had been under pressure to name a more progressive Democrat, rather than keep Republican Powell in the role.

Powell has guided the U.S. central bank and the country’s economy through the pandemic recession, unleashing unprecedented monetary stimulus to keep financial markets afloat. His renomination now heads to the Senate for confirmation.

U.S. stocks initially reacted positively to the announcement but reversed course towards the end of the session and yields continued to rise. U.S. stock futures were steady in overnight trading on Monday. Shares in Asia-Pacific were mixed in Tuesday trade.

Earnings come from Severn Trent, Compass and Kingfisher on Tuesday.

— CNBC’s Jeff Cox and Thomas Franck contributed to this report.