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At 03:05 ET (08:05 GMT), the DAX index in Germany traded 0.7% higher, the CAC 40 in France traded up 0.6% and the FTSE 100 in the U.K. rose 0.4%.
European equities have started the new year with the same positive outlook as they ended the last, driven by expectations that 2024 will mark the start of a global easing cycle.
While hopes for cuts from the U.S. Federal Reserve has been the dominant driver, investors are also looking for the European Central Bank to announce at least 150 basis points of rate cuts this year as a whole.
Inflation has started to retreat quite rapidly but the latest signs point to the eurozone suffering from a recession during the latter half of last year.
All eyes Tuesday will be on the release of manufacturing PMI data for December for the key eurozone countries, and are expected to show this key sector remains firmly in contraction throughout the region.
Private-sector data, released earlier Tuesday, indicated China’s factory activity expanded at a quicker pace last month, but this was in stark contrast to Sunday’s official data which revealed manufacturing activity shrank for a third straight month in December.
In corporate news, ASML (AS:ASML) stock fell 0.4% after the Dutch government partially revoked the semiconductor equipment maker’s export license to China for two of its systems used in manufacturing advanced chips.
ASML said it does not expect the move to have a material impact on its financial outlook for 2023, but it could still prompt a response from Beijing.
Danone (EPA:DANO) stock rose 0.5% after the French food giant said earlier Tuesday it had signed an agreement to sell its premium organic dairy units in the United States to investment firm Platinum Equity.
Oil prices rose strongly Tuesday, rebounding after hefty losses in 2023, on concerns of potential supply disruptions in the Middle East after more violence in the Red Sea, a vital trade route between Europe and Asia.
By 03:05 ET, the U.S. crude futures traded 1.5% higher at $72.69 a barrel, while the Brent contract climbed 1.7% to $78.33 a barrel.
Reports over the New Year weekend showed that U.S. strikes had killed about 10 Houthi fighters and sank three boats of the Yemeni group, after a series of strikes by the Houthis on several military and commercial vessels in the region.
Both benchmark contracts had shed over 10% each in 2023, coming under pressure from persistent concerns over sluggish demand and higher-than-expected supply conditions.
Additionally, gold futures rose 0.5% to $2,082.80/oz, while EUR/USD traded 0.2% lower at 1.1027.
