BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may open higher on Tuesday as the United States and China agreed to extend their tariff truce for another 90 days.
The truce extension, now set to last until November 10, will give more time for negotiations about 'remedying trade imbalances' and 'unfair trade practices', the White House said.
U.S.-China Business Council president Sean Stein described the extension as 'critical to give the two governments time to negotiate an agreement' that could pave the way for a Trump-Xi meeting this fall.
Focus also shifts to the U.S. Labour Department's report on U.S. consumer price inflation later in the day that could impact the outlook for interest rates.
The annual rate of price growth is expected to inch up to 2.8 percent in July from 2.7 percent in June.
Core consumer price inflation, which exclude food and energy prices, is expected to increase by 0.3 percent after rising by 0.2 percent in June. The annual rate of growth is seen at 3.0 percent, up from 2.9 percent in June.
Reports on producer price inflation, retail sales and industrial production due later in the week may provide further clues on the Fed's rate trajectory.
CME Group's FedWatch Tool currently indicates an 86.5 percent chance the Federal Reserve will lower interest rates by a quarter point next month.
Meanwhile, amid growing speculation about who will replace Fed Chair Jerome Powell, reports suggest that the Federal Reserve's two vice chairs, Michelle Bowman and Philip Jefferson, and Dallas Fed President Lorie Logan are under consideration to lead the central bank when the position opens next year.
Treasury Secretary Scott Bessent will interview additional candidates in the coming weeks, media reports quoted two administration officials as saying.
In another development, President Trump named EJ Antoni, chief economist of the conservative Heritage Foundation, as the next Commissioner of the Bureau of Labour Statistics (BLS).
In a post on Truth Social, Trump praised Antoni as 'highly respected' and pledged that under his leadership, the bureau's figures would remain 'honest and accurate.'
On the geopolitical front, Trump downplayed expectations for the upcoming meeting in Alaska, saying he would confer with Ukraine and European leaders after the sitdown, adding it would be 'really a feel-out meeting.'
Asian stocks were mixed, even as Japan's Nikkei surging nearly 3 percent to hit a new record on optimism over global trade.
Oil prices edged higher amid the U.S-China trade truce extension and ahead of U.S.-Russia talks.
The dollar firmed against the yen while gold steadied above $3,350 per ounce following a 1.6 percent drop on Monday.
Following days of speculation that gold bars might be subject to country-specific duties, the Trump administration said it would not impose tariffs on gold imports.
The European economic calendar remains light, with unemployment data from the U.K. and economic confidence figures from Germany awaited later in the day.
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