A look at the day ahead in European and global markets from Anshuman Daga

An impressive 6% rally in global stocks this month, the first gain in January after three years, has got investors all excited after a dismal 2022.

Fundamentally, prospects for https://daga88.trade/ the world economy are not as bad as feared just a few months ago, prompting the International Monetary Fund to raise its 2023 global growth outlook slightly.

The IMF cited "surprisingly resilient" demand in the United States and Europe, easing of energy costs and the reopening of China's economy.

Still, it would be wise for investors to be mindful of a gap between expectations and reality.

On Monday, hotter-than-expected inflation data from Spain and an unexpected decline in the German economy in the fourth quarter created uneasiness for stock bulls, dragging down European shares.

Asian equities fell 1% on Tuesday and the dollar was eyeing a fourth monthly loss as investors reckon a peak in U.S. interest rates could swing into view as soon as this week's Federal Reserve meeting.

Flash GDP numbers are due from the euro zone, along with growth data for France and Italy. The numbers are likely to be keenly watched for signs on how weary economies are faring.

The ECB is all but certain to raise rates by half a percentage point on Thursday but fresh inflation data is still crucial for the central bank's policy guidance for subsequent meetings.

The Bank of England is set to raise rates by 50 bps to 4.0%, respectively. Headline inflation moderated in December to 10.5%, but it's still over five times its official target.

Money market bets show that the U.S. Federal Reserve is set to raise its policy rate by 25 basis points to 4.50%-4.75% on Wednesday.

Adding to pressure on British finance minister Jeremy Hunt to come up with a growth plan, the country became the only Group of Seven nation to suffer a cut to its 2023 economic growth outlook in IMF forecasts published on Tuesday.

Britain's flagging economy now appears set to shrink by 0.6% this year, a sharp downgrade from previously expected growth of 0.3% in the IMF's last forecast in October.

Meanwhile, a U.S. federal appeals court ruled on Monday that drug manufacturers can limit healthcare providers' use of outside pharmacies for dispensing drugs under a federal drug discount programme, marking a victory for Sanofi, Novo Nordisk and AstraZeneca.

Finally, there's good news for tech staff. With thousands of layoffs taking place in Silicon Valley, some German companies, faced with a tight labour market and a shortage of workers with key software engineering skills, are seizing on the West Coast's woes as an opportunity to recruit top talent.

Key developments that could influence markets on Tuesday:

Economic data: Euro zone Q4 flash GDP; France Q4 GDP, Jan CPI flash; Germany Dec import prices, retail sales, flash CPI; Italy preliminary Q4 GDP

Speakers: Swedish central bank governor Erik Thedeen participates in an open hearing on financial stability in the Swedish economy in Stockholm

European results: UBS, Swedbank

U.S. economic data: Q4 employment wages, Q4 Nov house prices

U.S. Federal Reserve begins two-day meeting

U.S. results: Exxon Mobil, Caterpillar, General Motors, Pfizer, McDonald's, UPS

(Reporting by Anshuman Daga; Editing by Jacqueline Wong)