By Peter Nurse 

- European stock markets traded in subdued fashion Tuesday, as investors focused on the ongoing earnings season ahead of the release of key U.S. inflation data.

At 3:45 AM ET (0845 GMT), the DAX in Germany traded 0.1% higher, the U.K.’s FTSE 100 climbed 0.4%, while the CAC 40 in France fell 0.1%.

European stock markets have hit record highs of late, boosted by relatively dovish central bank messages, signs of a global economic recovery and a healthy earnings season on both sides of the Atlantic.

Further evidence of this ongoing recovery came with the results of Associated British Foods (OTC:ASBFY), with the U.K.-based company forecasting a significant increase in sales and profit at its Primark fashion chain in its new financial year after the 2020-21 performance was dented by store closures due to the pandemic. Its stock rose 6.8%.

Bayer (OTC:BAYRY) stock rose 2.7% after the German life sciences group saw its third-quarter sales and earnings grow substantially, while announcing a change at the head of its crop science unit.

On the flip side, Direct Line (LON:DLGD) stock fell 1.4% after the insurer reported a disappointing third quarter, weighed by a poor showing at its motor and travel units, while Munich Re stock fell 3.1% after the German reinsurance group reported elevated third-quarter catastrophe losses.

Investors will also keep an eye on the latest U.S. producer price index due later Tuesday, and then the consumer price index on Wednesday, as high levels of inflation could force central banks, and the Federal Reserve in particular, to raise interest rates earlier than expected.

On the data front, the key release in Europe will be Germany’s ZEW survey of economic sentiment for November, which comes after a string of disappointing industrial data from Europe's economy, and against the backdrop of record high Covid-19 infections.

Crude prices edged higher Tuesday, adding to recent gains, with the passage of the infrastructure bill in the U.S. adding to a market already benefiting from tight supply and a global economic recovery.

U.S. crude oil supply data from the American Petroleum Institute are due later Tuesday while U.S. Energy Information Administration}} will also release its Short-Term Energy Outlook.

By 3:45 AM ET, U.S. crude futures traded 0.5% higher at $82.34 a barrel, while the Brent contract rose 0.4% to $83.75.

Additionally, gold futures fell 0.1% to $1,825.70/oz, while EUR/USD traded just higher at 1.1589.