(Investing.com) European stock markets are expected to open marginally lower Tuesday, with investors monitoring the Ukraine war as well as U.S. monetary policy developments.
At 3 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.1% lower, CAC 40 futures in France dropped 0.4% and the FTSE 100 futures contract in the U.K. fell 0.1%.
Russian troops have continued their bombardment of several cities in Ukraine, with the southern port of Mariupol having become a focal point while attacks were also reported to have intensified on the second city of Kharkiv.
Diplomacy efforts have so far failed to bear fruit, while U.S. President Joe Biden issued a strong warning that Russia is considering using chemical weapons, adding that President Vladimir Putin's "back was against the wall."
Biden is set to arrive in Brussels on Thursday for summits with members of NATO as well as the European Union governments, to discuss their response to Russia’s aggression.
Elsewhere, investors will also digest Monday’s hawkish comments from Federal Reserve Chairman Jerome Powell in the wake of last week’s interest rate hike of 25 basis points, the likely start of a sustained tightening cycle.
Powell said the central bank must move "expeditiously" to raise rates and possibly "more aggressively" to keep inflation from getting entrenched. Influential investment bank Goldman Sachs now expects the Fed to raise interest rates by 50 basis points at both its May and June meetings.
European Central Bank President Christine Lagarde said on Monday that the world's two top central banks will move out of sync in the foreseeable future, as the war in Ukraine will have very different effects on their economies.
There is little in the way of major economic data releases due Tuesday, while in corporate news Finland's Nokian Renkaat (HE:TYRES) said it has decided to continue production in Russia to ensure it retains control of its local factory.
Oil prices extended recent gains as the foreign ministers of European Union governments discussed joining the United States in sanctioning Russian oil in return for Moscow’s invasion of Ukraine.
Attacks on Saudi Arabian oil facilities by Iranian-aligned Houthis over the weekend have also added jitters to the market.
By 3 AM ET, U.S. crude futures traded 2.6% higher at $112.78 a barrel, while the Brent contract rose 2.8% to $118.81. Both contracts had settled up more than 7% on Monday.
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U.S. crude oil supply data from the American Petroleum Institute are due later in the day.
Additionally, gold futures rose 0.4% to $1,936.40/oz, while EUR/USD traded 0.4% lower at 1.0969.