Peter Nurse 

Investing.com. European stock market are likely to open marginally higher Monday. This is due to gains made in Asia and major Chinese cities beginning to relax mobility restrictions. Activity could however be restricted by Memorial Day in the U.S.

At 02:01 AM ET (0600 GMT), Germany’s contract traded 0.3% higher while France’s contract rose 0.4%. The U.K contract rose 0.4%.

Europe’s equity markets posted gains last week following Wall Street’s optimistic tone. This was because investors felt encouraged by suggestions that the Federal Reserve might ease its tightening once it had hiked strongly over the previous two months.

Adding to this relative optimism have been gains in Asia, with both the in Japan and Hong Kong’s up over 2%, boosted by the news that curbs on movement in key regions of China were loosened over the weekend.

Shanghai will be able to lift a COVID lockdown of two months on June 1st, while Beijing opened some public transportation on Sunday.

Strict movement restrictions in key Chinese cities have severely hit the nation’s economy, the second largest in the world and a key export market for a number of European companies.

Back in Europe, and consumer inflation data are due later Monday, and will be studied carefully ahead of Tuesday’s release of the latest flash estimate. 

Economists predict that the consumer price index will hit 7.7% in May. This would be an increase from 7.4% recorded in April. It would thereby cement the expectation for the ECB to normalize its policy, possibly starting this summer.

Eurozone data for May will also be released this session. They are expected to indicate a decrease in confidence due to rising prices and ongoing war in Ukraine.

Oil prices rose on Monday as they traded at two-month new highs in advance of an EU meeting to discuss sanctions for Russia against its invasion of Ukraine.

Later in the session, the EU will begin a meeting lasting two days. It is scheduled to discuss banning seaborne Russian oil deliveries while permitting pipeline deliveries. A deal like this could be acceptable to the Czechias, Slovakia, Hungary and Czechia because they will continue to get their Russian crude while allowing for time to find alternative sources.

A further Russian oil ban would have a negative impact on a market that is already tightening supply due to rising demand, as peak season approaches in Europe and the United States.

The futures closed 0.7% lower at $115.91/barrel by 02:01 ET. Contract prices increased 0.7% to $116.34

The price of gold rose 0.5% to $1860.10/oz while it traded 0.3% lower at 1.0754