Europe Shares Higher on German GDP Boost

European shares are expected to open broadly higher Tuesday as a surprise uptick in German GDP boosts sentiment.


The UK’s FTSE is called up by 2 points at the open, while the German DAX looked set to open 14 points higher and the French CAC also seen 14 points higher.

German gross domestic product grew a surprise 0.5 percent in the first quarter in seasonally adjusted terms - well ahead of a consensus forecast, as exports helped the economy bounce back from contraction of 0.2 percent in the fourth quarter.

Overnight, global shares took a battering as fears of a Greek exit from the euro zone grew.

Greek political parties continue their talks for a ninth day in a last-ditch attempt to avoid another round of elections in June. Polls are beginning to show that far-left party Syriza the most vocal opponent to the bailout deal would be in for a win if an election were held now.

The country goes to the markets later Tuesday when it offers 1 billion euros ($1.28 billion) in 3-month T-bills at 10:00 a.m. BST (5:00 a.m. ET).

Euro zone finance ministers dismissed any talk of Greece leaving the euro as “propaganda” and “nonsense,” even as the Financial Times reported that a European Central Bank governor said a Greek exit would be possible.

The FT also reported that Spain is considering a merger of four Spanish banks that would create the country’s fifth-largest lender.

The JPMorgan Chase trade that will cost the bank at least $2 billion is being investigated by the Federal Reserve, which is probing whether any of the bank’s other operations are taking similar risks.

Media reports suggest Facebook’s IPOhas increased its share offering to raise more than $12 billion, comfortably making it Silicon Valley’s biggest offering ever and potentially valuing the company at $100 billion.

Angela Merkel hosts the new French President Francois Hollande in Berlin later Tuesday in what is seen as the first of a number of likely awkward meetings between the two.

The Socialist French leader’s key election pledge was to rework the France’s fiscal compact to include growth, rather than just austerity measures.

European Union GDP figures out later Tuesday are likely to be closely watched by the markets as a barometer for the health of the bloc's economy. Forecasts suggest a contraction of around 0.3 percent.