By Peter Nurse 

- European stock markets are expected to open in a mixed fashion Tuesday, as investors fully return from the festive period and digest the economic outlook for the new year.

At 02:00 ET (07:00 GMT), the contract in Germany traded 0.6% lower, in France dropped 0.6%, while the contract in the U.K. rose 0.2%, in its first day of trading in 2023.

Investors have been focusing on the contradictory implications of China's opening up and a resurgence in COVID-19 cases, and the potential impact on Europe given the importance of this export market to some of the region’s biggest companies.

Data from a private survey, released earlier Tuesday, confirmed Chinese manufacturing activity shrank for a fifth straight month in December, with the coming in at 49.0. 

This represents a drop from last month’s reading of 49.4, and the fifth straight month that the manufacturing PMI has spent in contraction territory. 

IMF Managing Director Kristalina Georgieva said on Sunday that the United States, Europe and China - the main engines of global growth - were all slowing simultaneously, making 2023 tougher than 2022 for the global economy.

Further evidence of the slowdown in Europe is expected later Tuesday, with and data for December scheduled, as well numbers.

Oil prices edged higher Tuesday, trading near their highest levels in a month despite the weak factory data from China, the world's largest crude importer and second-largest oil consumer.

Traders appeared to be taking a more optimistic view on the longer-run prospects for the world's second-largest economy after the worst of the COVID waves had passed.

By 02:00 ET, futures traded 0.4% higher at $80.60 a barrel, while the contract rose 0.4% to $86.22. 

Additionally, rose 1.2% to $1,848.30/oz, while traded 0.1% lower at 1.0656.