Peter Nurse 

Investing.com. European stock market are likely to open higher on Monday. Risk sentiment is rising despite growing interest rates and worries about inflation.

At 2. AM ET (0600 GMT), Germany’s contract traded 1.1% higher while France rose 1.1%. The U.K. contract rose 0.8%.

Europe is expected to see gains after regional indices close higher Friday. China eased a key rate after a volatile, largely negative week.

There is still a lot of uncertainty due to concerns over inflationary pressures. This has been exacerbated by ongoing conflict in Ukraine and the tightening of central banks and the Federal Reserve, in particular. It also slows down economic growth. 

The Friday figures showed an unexpectedly high jump, indicating that prices will continue to rise in the near future. 

This could be reflected in Germany’s for May, due for release later in the session, which is expected to show a decline to 91.4, from 91.8 in April, as soaring input costs weigh on sentiment. 

Also of interest will be the World Economic Forum which kicks off in Davos this week after a two-year pandemic-enforced hiatus, with Russia’s invasion of Ukraine expected to feature heavily.

More U.S. retail earnings this week are due. These will likely influence sentiment, after last week’s disappointing results rattled markets.

BMW (ETR.) may also be the focus after BMW’s production chief, Monday in an interview with Reuters said that an embargo against Russian gas would cause the sector to halt. 

Oil prices edged up Monday due to increased demand in Shanghai, which is preparing for reopening at June’s beginning after a two-month lockdown. Also ahead of the main U.S. driving seasons.

Lockdowns in China, and the commercial hub Shanghai, in particular, to combat a prolonged COVID outbreak have hammered industrial output and thus fuel demand from the world’s top crude importer. 

U.S. gasoline demand will also increase, as the peak season for driving in the United States traditionally begins on Memorial Day Weekend at the end May and ends on Labour Day in September.

The futures closed 0.8% lower at $111.11/barrel by 02:01 ET. Contracts rose 0.8%, to $110.91. 

Also, the price rose 0.6% at $1,852.43/oz while it traded 0.4% higher to 1.0600.