FX.co ★ European Shares May See Cautious Gains At Open

European stock markets are expected to experience a slight increase in the opening on Tuesday, primarily due to the calming geopolitical tensions and an encouraging inflation outlook. These factors have strengthened the belief that the European Central Bank will soon initiate interest rate cuts.

Asian markets showed varied results, following a moderate recovery of U.S. stocks from their previous week's losses. However, potential regional profits were limited, as the market anxiously awaits the forthcoming financial reports from major U.S. tech companies due this week.

Investors are also keenly awaiting the release of the first-quarter U.S. GDP data and the core personal-consumption expenditures (PCE) price index. This index is the Federal Reserve's preferred inflation indicator, and its release this week could offer insights into the schedule and rate of potential interest-rate cuts this year.

Interestingly, the Federal Open Market Committee (FOMC) is likely to maintain its fed funds target rate unchanged at 5.25-5.50 percent, as its meeting spanning April 30 to May 1 concludes. The rise in the dollar's value had a detrimental effect on bullion, leading to a roughly 1% drop in spot gold that brought prices to around $2,300 per ounce.

While treasury bonds remained stable, the price of oil saw a slight increase of around half a percent. This is likely due to anticipated tighter oil supplies in the upcoming months.

Flash composite PMI data from Germany, France, the U.K., and the Eurozone are expected to garner interest later today.

In other developments, U.S. stocks regained some ground after a previous session sell-off. This was boosted by lessening fears of wider conflict in the Middle East and anticipation surrounding quarterly results from major companies. The S&P 500 saw a 0.9% increase, putting an end to a six-day losing streak.

The Dow Jones Industrial Average and Nasdaq Composite also experienced increases of 0.7% and 1.1% respectively.

European stocks also made gains on Monday following positive commentary from the European Central Bank and calmer situations in the Middle East. The pan-European STOXX 600 saw a marginal 0.6% increase.

Similarly, Germany's DAX rose by 0.7%, France's CAC 40 by 0.2%, while the U.K.'s FTSE 100 saw an impressive 1.6% rise, achieving a record close. This optimism stems from the belief that the Bank of England will implement two interest rate cuts this year.