Dollar edged lower amid busy corporates' earnings day

With investors assessing the latest corporates' earnings ahead of this week's pivotal Federal Reserve meeting, European shares are on track for a muted start. US dollar index trades lower on Tuesday, consolidating around 106.40 for the fourth consecutive day. An update on the world economy is released by the IMF. Finland's unemployment data and Spain's and Sweden's PPI inflation are expected.

Earnings reports

Europe's second-quarter earnings season kicks off this week, with UBS beginning a round of earnings by major banks as investors watch for signs of a weaker economy, rising interest rates, and conflict in Ukraine affecting their operations. The latest sign that the world's economy is slowing down rapidly was Walmart's profit warning late on Monday, with the retail giant pointing to the fact that customers are cutting back on discretionary spending. A long list of companies is scheduled to report quarterly earnings today, including Microsoft, Alphabet, Unilever, and Visa.

Rising concerns over gas shortages in Europe

Oil prices rose on Tuesday for a second day amid concerns about tightening European supplies after Russia cut gas supply through a major pipeline. From 7 am Moscow time on Wednesday, Gazprom will cut shipments on the Nord Stream pipeline to about 20% of its capacity. Winter approaches in the EU, and that's a worrisome prospect. Wood Mackenzie says Europe's gas reserves will run out by the end of February if Nord Stream flows are completely cut off. In the meantime, seaborne fuel shipments are increasingly competitive, which could lead to higher prices and shortages. An emergency meeting of EU energy ministers is scheduled today to address the bloc's contingency plans.

Events of today

Tuesday's economic calendar is packed with the latest US housing data. Investors await the new home sales report, which is expected to show weakness, falling to 660K in June from 696K.

CB consumer confidence will be another highlight today, with July's index expected to drop to 97.2 from 98.7 in June. This index is a leading indicator as it is used to predict consumer spending in the future. CB consumer confidence has been on a backfoot since last year, with the figures declining continuously from 128.9 to 98.7 in twelve months.