European markets had a mixed opening on Tuesday with investors choosing to take some profits following a six-day winning streak. Even if most traders continue to cheer the improving economic outlook brought by slower virus infections and solid financial aid packages, the prospect of inflation is weighing on today’s market sentiment.
Indeed, in an environment where share markets are already near record highs led by stretched valuations in certain sectors, higher inflation raises the prospect of a pull-back. While such a bearish market correction is unlikely for now, investors will start to question the length and strength of this bull run later in the year if macro data confirms increasing prices in many economies. Meanwhile, investors will keep an eye on corporate results today with Cisco, Ford, and Twitter as well as from the French oil giant Total.
