Europe Economy

European Shares Seen Edging Higher as Gold Hits $1,900

European stocks are expected to open slightly higher on Tuesday as investors wait for key data from the euro zone and speculate over whether the Federal Reserve is about to pump more money into the system in a bid to boost sentiment and economic growth.

Euros & Downward Graph
Steven Hunt

The Dow finished in positive territory on Monday but closed the day well below its session high whilst Asian stocks edged higher in overnight trade.

Later this morning investors will look out for get PMI manufacturing data from the euro zone which could confirm the recent slowdown in Germany and France is getting worse.

With risk appetite low, gold hit a fresh all-time high in Asian tradeof $1,900 an ounce whilst crude prices are steady following a volatile session on Monday as the market watched events in the Libyan capital Tripoli.

Rebel forces there are close to ousting Muammar Gaddafi.

A number of oil companieshave told CNBC they hope to be back pumping crude in the OPEC nation soon.

In Japan the hugely unpopular prime minister Naoto Kan is expected to resign next week but the chances of his fiscally conservative finance minister, Yoshihiko Noda, becoming the 6th Japanese leader in 5 years have been dealt a blow by news that former foreign minister Seiji Maehara has thrown his hat into the ring.

For the time being at least the market appears to be more focused on the chances of Bank of Japan intervention to weaken the yen.

In Paris on Tuesday German and French finance ministers will meet to flesh out the details of plans to impose tough new rules on government borrowing by euro zone governments with German Finance Minister Wolfgang Schaeuble still refusing to create a euro bond, something he and Chancellor Angela Merkel believe would create a "debt union" Later this morning the Spanish treasury will issue up to 3 billion euros worth of short term debt.

The auction, which is finalized at 10:40am CET is expected to be well bid with the European Central Bank already supporting the Spanish market via bond purchases.

In the United States, President Barack Obama will continue to focus on the economy and his plans to boost jobs whilst attempting to enjoy a vacation with his family at Martha's Vineyard.

The president is expected to visit Detroit on September 5, the Labor Day holiday, to discuss the economy with business and union leaders.

Deven Sharma, the president of ratings agency S&P is to stand down next month to be replaced by Douglas Peterson, currently the COO of Citibank.

Sharma has been widely criticized for his firm's decision to downgrade the US AAA rating this month.

Although Sharma steps down on September 12 he will remain at parent company McGraw Hill to work on a strategic review until the end of the year.