(Alliance News) - Major European marketplaces are expected to rally Tuesday, according to IG futures, after an early week weighed down by complicated China-U.S. relations and the aftermath of the U.S. employment data, which presaged further hikes by the Fed.

"The hawkish speeches by ECB Governing Council member Robert Holzmann, followed by Catherine Mann of the Bank of England, further undermined market expectations of potential rate cuts by the end of the year," commented Michael Hewson, Chief Market Analyst at CMC Markets.

"In fact, these expectations were always wishful thinking and it is just unfortunate that it took a heavy U.S. payrolls report and a strong rebound in U.S. services activity in January to get that message across. Nevertheless, there still seem to be those who are clinging to the hope that we will still see a sharp decline in overall inflation that will mean that central banks will be forced to cut rates by the end of the year," the analyst concluded.

Thus, the FTSE Mib is given up 55.0 points or 0.2 percent after closing up 0.3 percent at 27,022.33, with an intraday low of 26,692.35.

In Europe, Paris' CAC 40 is expected up 18.0 points or 0.3 percent, London's FTSE 100 is expected to open up 12.9 points or 0.2 percent, while Frankfurt's DAX 40 is expected up 17.5 points or 0.1 percent.

Meanwhile, the Reserve Bank of Australia raised the liquidity rate by 25 basis points to 3.35 percent at its February meeting, meeting market expectations.

Tuesday's was the ninth rate hike since May last year, bringing borrowing costs to a level not seen since September 2012 and bringing a total 325 bp increase, the strongest annual tightening since 1989.

Also in the morning, the Federal Statistical Office, Destatis, reported that industrial production in Germany fell sharply by 3.1 percent month-on-month in December 2022, down from November's upwardly revised 0.4 percent increase and worse than market forecasts of a 0.7 percent decline.

This was the sharpest decline in industrial production since March 2022.

Among the smaller listings on Monday evening, the Mid-Cap gave up 0.3 percent to 44,550.11, the Small-Cap closed just above par at 30,081.15, while Italy Growth finished in the green by 0.4 percent to 9,631.66.

On the Mib, good session for Telecom Italia, up 3.2 percent. Last week the company announced that the board of directors had decided to reconvene on February 24 to decide on the non-binding offer received from KKR for NetCo.

The 'buy' side also prevailed significantly on Intesa Sanpaolo, which was in the green by 2.7 percent. On Friday, the board of directors approved operating and consolidated results as of December 31, which closed with net interest-driven earnings reaching EUR5.5 billion, excluding Russia/Ukraine de-risking. In the second half of 2022, exposure to Russia was reduced by 68 percent -- about EUR2.5 billion -- to below 0.3 percent of the group's total customer loans.

Moncler, on the other hand, closed 2.3 percent in the red at EUR57.44. Of note, Goldman Sachs raised its target price on the stock to EUR64.20 from EUR62.40.

STMicroelectronics also lost ground, giving up 2.2 percent after three sessions of gains.

Also trailing was FinecoBank, down 1.9 percent. On the stock-which closed at EUR16.63-Jefferies initiated coverage by setting fair value at EUR14.80.

On the Mid-Cap, among the minority of the bullish group, Alerion took home 3.8%, after a 0.6% loss in the previous session.

Piaggio also did well, closing with a positive balance of 1.8 percent at EUR3.72. The stock touched a 52-week high at EUR3.74.

Anima Holding gave up 2.0 percent after reporting Monday that the group's net inflows of assets under management -- excluding Branch I insurance proxies -- in January 2023 were positive at EUR34.0 million. At the end of January, the group's total assets under management thus stood at more than EUR182.43 billion, down from EUR201.70 billion recorded as of January 31, 2022.

Banca Monte dei Paschi left 4.7 percent on the parterre, pending the publication of results scheduled for today.

Saras closed down 4.8 percent, with the oil company ending its third session in a row with a bearish mark.

On the Small-Cap, Gequity recovered in the finish after much of the session among the bearish, closing flat at EUR0.0124. High trading volume was recorded on the stock, with nearly 1.5 million pieces changing hands compared to a three-month daily average of 473,000.

Restart, on the other hand, gave up 3.8 percent. High trading volume on this stock as well, with over 134,000 pieces compared to the three-month average of 23,800.

Risanamento -- in the red by 2.0 percent -- reported on Thursday that it had seen its preliminary results for 2022, whereby the company reported a net loss of EUR53.8 million from EUR24.9 million in the same period last year.

On a positive note, however, Trevi Finanziaria Industriale rose 4.0 percent, in its fourth bullish session.

Among the SMBs, Frendy Energy finished 7.9% in the red at EUR0.2320, after Friday's 3.3% gain. The stock had previously come from four bearish sessions.

In contrast, Alfonsino rose 3.4 percent to EUR1.0180. The stock has nearly doubled its market cap in the past month, up more than 98 percent.

ErreDue closed up 2.1 percent. On Friday, the company announced that it had signed a contract for the construction of a 750 mc/H hyperpure nitrogen plant with a company that is "among the most important entities, nationally and internationally," active in the metallurgy sector. The sales contract, the amount of which is about EUR900,000.

Instead, Growens closed up 5.8 percent. On Friday, the board of directors approved the signing of a binding agreement to sell Growens' MailUp business unit and its holdings in Contactlab, Acumbamail, MailUp Nordics and its subsidiary Globase International to TeamSystem for a total consideration of EUR70 million on a cash/debt free basis.

It did even better for FOS, which posted a plus 8.5 percent to EUR3.97, pending results due to be published on Wednesday.

In Asia, the Nikkei closed fractionally in the red at 27,685.47, the Hang Seng is picking up 0.4 percent to 21,312.06, and the Shanghai Composite closed in the green by 0.3 percent at 3,248.09.

In New York on Monday, the Dow Jones closed 0.1% in the red at 33,891.02, the S&P gave up 0.6% to 4,111.08 while the Nasdaq lost 1.0% to 11,887.45.

Among currencies, the euro changed hands at USD1.0733 against USD1.0724 at Monday's close. In contrast, the pound is worth USD1.2027 from USD1.2011 on Monday evening.

Among commodities, Brent crude is worth USD82.15 per barrel versus USD80.36 per barrel on Monday evening. Gold, on the other hand, trades at USD1,873.39 an ounce from USD1,868.44 an ounce at Monday's close.

On Tuesday's macroeconomic calendar, at 0845 CET, focus on France's trade balance.

At 1430 CET, room for the U.S. trade balance while a speech by Federal Reserve Chairman Jerome Powell is expected at 1840 CET. At 2230 CET, eyes on weekly oil stocks.

Among companies, results from Banca Monte dei Paschi, Popolare di Sondrio, Banco BPM and FinecoBank are due.

By Chiara Bruschi, Alliance News reporter

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