• European stocks decline as risk rebound sees limited dip-buying.
• ECB due Thursday, Europe PMIS on Wednesday.
• Euro area PMIs expected to show slight growth.

European equity indexes initially climb on Tuesday, hitting near-term highs before revising direction once again and testing into the low side of recent activity.

European stocks weren’t able to follow US equities higher, lacking the same drive from AI tech stocks that saw the American equity sector climb into new highs once again on Monday.

This week sees another showing from the European Central Bank (ECB) who is expected to remain flat on interest rates for the time being despite broad-market hopes and expectations of faster, sooner rate cuts.

ECB policymakers have worked double time in the past week trying to talk down market hopes for rate cuts to begin soon, with some particularly determined investors hoping for rate cuts to start as early as March. ECB officials have pushed firmly back on overeager markets, setting a more reasonable hopeful deadline for the summer months.

European Consumer Confidence declined in January from -15.0 to -16.1 versus the forecast -14.3, and the ECB’s Bank Lending Survey kicked off the day’s overall losses after it was revealed that bank lending to both consumers and businesses have continued to decline through the third quarter, and further declines in credit facility access are expected though 2024’s first quarter.

Germany’s DAX and France’s CAC 40 both ended Tuesday down a little over a third of a percent with the DAX down 56.27 points and ending the day at €16,627.09 while the CAC 40 shed 25.21 points to close down at €7,388.04, losing 0.34% on the day.

The pan-European STOXX600 equity index shed 1.33 points to close down 0.28% at €471.53, and London’s FTSO held mostly flat on the day, closing down a scant 0.3% and down 1.98 points to £7,485.73