A take a take a look at the day ahead in European and global markets from Rae Wee

Investors hoping for a roaring restart to China’s stock rally, after the mainland’s week-long holiday, were dissatisfied on Tuesday when Beijing policymakers offered only broad brush strokes about stimulus plans at a high-profile press conference.

The National Development and Reform Commission (NDRC) said it was “fully confident” of meeting its targets but offered not one of the foremost points that investors are craving on China’s aggressive stimulus measures.

Although the vital thing mainland stock indexes did surge 10% to multi-year highs shortly after the open, those gains were quickly pared back.

In stark contrast to the mainland, shares in Hong Kong showed a sea of red, with the Hang Seng Index tumbling greater than 10% at one point.

Analysts initially attributed the divergence to Chinese stocks playing catch-up, since Hong Kong had surged while the mainland was on holiday, nevertheless it was soon clear that the markets were dissatisfied over the dearth of stimulus specifics from Beijing.

That’s arrange a negative opening for Europe, with stock futures falling in Asia hours.

EUROSTOXX 50 futures slid 0.8%, while FTSE futures retreated 0.5%.

The economic calendar is relatively light for the day, leaving the foremost goal squarely on China, although fears of an escalating conflict throughout the Middle East and a repricing of Federal Reserve expectations will even remain front of mind for investors.

Oil prices retreated on Tuesday – partly reflecting events in China, regardless that it was also attributable to a slight step back from a strong rally at first of the week on developments throughout the Middle East. Hezbollah fired rockets at Haifa, and Israel looked poised to expand its offensive into Lebanon.

Worries about disruptions to grease supplies have sent Brent and U.S. crude futures surging greater than 10% for the month up to now, and so they appear unlikely to reverse course anytime soon.

As for the Fed, the market’s short-lived conviction that it could stick with a dovish path evaporated after Friday’s blockbuster payrolls report. Market pricing now points to just one other 50 basis points of rate cuts by December.

The benchmark 10-year Treasury yield, reflecting the less aggressive expectations, stayed elevated above 4% on Tuesday, while the two-year yield hovered near its highest in greater than a month.

Key developments that may influence markets on Tuesday:

– European Central Bank, Federal Reserve policymakers speak

– Germany industrial output (August)

(By Rae Wee; Editing by Edmund Klamann)