A look at the day ahead in European and global markets from Ankur Banerjee

Markets are still reeling from China's raft of unimpressive data and with the economic calendar now light, worries over a stuttering post COVID-19 recovery in the world's second-biggest economy are likely to linger as Europe wakes up.

The anaemic Chinese recovery has cast a shadow over global markets, particularly in Europe, where consumer, technology, industrials and materials sectors all have significant exposure to China.

That means investors are likely to have a mixed appetite for European stocks.

Focus will be on Europe's luxury firms, which took a beating on Monday after underwhelming earnings from Cartier owner Richemont, dragging the pan-European STOXX 600 index lower.

MSCI's broadest index of Asia-Pacific shares outside Japan was down for second straight day after data on Monday showed China's economy faltered in the second quarter, cranking up pressure on policymakers to deliver more stimulus.

On Tuesday, China announced a series of measures aimed at boosting consumption of household consumer goods and services.

Meanwhile, speculators have amassed their biggest long position in sterling in dollar terms since Brexit. The party in the pound though is unlikely to last, hedge funds and investors say, citing untamed inflation and weak growth.

In the currency market, the euro touched a 17-month high, while sterling was hovering close to a fresh 15 month peak. [FRX/]

Traders expect more interest rate hikes from the European Central Bank and the Bank of England to combat inflation, even as markets presume the Federal Reserve is near the end of its hiking cycle.

Investor attention will also be on Danone after a source close to the matter told Reuters the French dairy group was reviewing its legal options after the Russian state took control of its subsidiary in the country.

Elsewhere, China and the United States meet this week in Beijing looking for ways to cooperate in both domestic policy and international trade in bringing down greenhouse gas emissions. The meeting comes as Asia, Europe and the U.S. feel the heat as temperatures soar.

Key developments that could influence markets on Tuesday:

Earnings: Morgan Stanley, Bank of America, Charles Schwab, Hasbro

(Reporting by Ankur Banerjee in Singapore; Editing by Sam Holmes)