-1649142397.jpg)
(Investing.com) - European stock markets are expected to open in a cautious manner Tuesday, with investors digesting the potential for more sanctions against Moscow, potentially leading to higher commodity prices and fueling inflation concerns.
At 2:10 AM ET (0610 GMT), the DAX futures contract in Germany traded 0.3% lower, while CAC 40 futures in France and the FTSE 100 futures contract in the U.K. both dropped slightly.
The United States and Europe were planning new sanctions to punish Moscow over alleged atrocities in Ukraine, with U.S. President Joe Biden on Monday accusing Russian President Vladimir Putin of war crimes over civilian killings in the Ukrainian town of Bucha.
German Chancellor Olaf Scholz said that Putin and his supporters would "feel the consequences" of events in Bucha, while Biden's national security adviser, Jake Sullivan, stated that new U.S. sanctions against Moscow would be announced this week.
The United States stopped the Russian government on Monday from paying holders of its sovereign debt more than $600 million from reserves held at American banks, but the major move would be for the European Union, and Germany in particular, to ban the import of Russian gas and oil.
Germany is heavily dependent upon Russia for energy, and agreeing to such a move would run into political difficulties given the economic repercussions.
German banks already expect sharply slower growth this year of around 2% due to the war in Ukraine, said Christian Sewing, the chief executive of Deutsche Bank (DE:DBKGn) and president of Germany's BDB bank lobby on Monday.
"The situation would be even worse if imports or supplies of Russian oil and natural gas were to be halted. A significant recession in Germany would then be virtually unavoidable," Sewing said.
Oil prices traded higher Tuesday, aided by the prospect of more sanctions on Russia, adding to the strong gains seen in the previous session.
Crude has soared above $100 a barrel, climbing to the highest levels since 2008 in the first quarter as Russia’s invasion disrupted supplies in an already tight market, adding to already high consumer prices and raising fears of stagflation.
By 2:10 AM ET, U.S. crude futures traded 1.7% higher at $105.03 a barrel, while the Brent contract rose 1.7% to $109.37. Both contracts settled more than 3% higher on Monday.
The European economic data slate Tuesday includes a number of March manufacturing and services PMI releases from the region, as well as the French industrial production numbers for February.
Incorporate news, Porsche (DE:PSHG_p) is likely to be in the spotlight after the German automaker detailed a challenging first quarter, with sales in the U.S. falling by 25% on the back of the supply chain disruptions, exacerbated by the Ukraine war.
Additionally, gold futures fell 0.2% to $1,930.40/oz, while EUR/USD traded marginally lower at 1.0969.
