European stock markets are expected to open largely higher Wednesday, with the focus squarely on the conclusion of the latest U.S. Federal Reserve policy-setting meeting.
At 03:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.6% higher, CAC 40 futures in France climbed 0.9%, while the FTSE 100 futures contract in the U.K. fell 0.1%.
Cooling inflation boosts sentiment in Europe
Sentiment has been boosted in Europe by Tuesday’s news that eurozone inflation dropped to its lowest level in over two years in October.
Prices grew by 2.9% year on year in October, the slowest pace since July 2021, from 4.3% a month earlier, according to Eurostat’s flash estimate.
The data is likely to cement the market’s view that the ECB is done with raising rates as part of its fight against high inflation. This follows the decision of ECB policymakers to pause the central bank’s longest streak of interest rate rises in its 25-year history last week, leaving the main policy rate at 4%.
Fed meeting in focus
However, it’s the U.S. central bank that will attract the most attention Wednesday, with the Federal Reserve set to conclude its latest policy-setting meeting later in the session.
The Fed is widely expected to stand pat on rates, and comments from Chair Jerome Powell will again take the spotlight as investors parse every word to gauge where interest rates are headed.
Data showing a resilient economy has markets considering the possibility of a 25 basis point hike in December, and traders are looking to see if Powell attempts to keep another hike on the table.
U.K. house prices rise in October
Back in Europe, there’s little on the European economic calendar Wednesday, although data from Nationwide showed that U.K. house prices rose 0.9% on the month in October, an annual fall of 3.3%, in a sign that this battered sector is attempting a recovery after a series of rate hikes by the Bank of England.
Barry Callebaut adjusts key target
In corporate news, Barry Callebaut (SIX:BARN), the world’s biggest chocolate maker, adjusted its mid-term target Wednesday, and now expects volumes to rise by a low to mid single-digit percentage over the next three years, after previously forecasting average volume growth of below 5% in the same period.
Italian truck and bus maker Iveco Group (BIT:IVG) raised its 2023 guidance for the third time this year, after it posted a rise in third-quarter adjusted operating profit.
Crude edges higher ahead of Fed decision
Oil prices crept higher Wednesday in cautious trading ahead of the conclusion of the latest Fed meeting, with traders also closely watching the latest developments in the Israel-Hamas conflict.
By 03:00 ET, the U.S. crude futures traded 0.4% higher at $81.35 a barrel, while the Brent contract climbed 0.6% to $85.55. Both contracts fell more than 1% the previous session, and also tumbled more than 10% in October, their worst month since May.
Data from the American Petroleum Institute industry body indicated, on Tuesday, that U.S. oil inventories rose 1.3 million barrels last week, slightly less than expected.
