European stock markets are expected to open higher Thursday, following strong gains on Wall Street on rising hopes that the Federal Reserve has completed its run of interest rate hikes.
At 03:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.6% higher, CAC 40 futures in France climbed 0.6% and the FTSE 100 futures contract in the U.K. rose 0.2%.
Sentiment buoyed by Powell’s comments
European equities are set to follow the positive lead on Wall Street overnight, with the tech-heavy Nasdaq Composite gaining 1.6%, after investors became increasingly confident the next move in U.S. interest rates will be down, not up in the wake of the latest policy-setting meeting from the U.S. Federal Reserve.
The Fed kept rates steady on Wednesday, as widely expected, and while Chair Jerome Powell maintained the option of another hike, his comments suggested he was less than committed to the idea.
Risks were now “more two sided” and almost “balanced”, he said in his press conference, and expectations of inflation “were in a good place”.
Bank of England seen holding steady
Back in Europe, it’s the turn of the Bank of England to announce its latest monetary policy decision later in the session.
This central bank is widely expected to follow the European Central Bank and the Fed in keeping interest rates unchanged at their 15-year high this month, but it still has to battle an inflation rate that came in at 6.7% in September, more than three times its target.
The European data slate includes German unemployment data for October, as well as manufacturing PMI numbers for many European countries and the eurozone as a whole.
Apple earnings are the day’s highlight
In corporate news, Apple (NASDAQ:AAPL), the world’s biggest company by market capitalization, is due to release its latest earnings after the U.S. market closes.
Ahead of that, German fashion house Hugo Boss (ETR:BOSSn) reported third-quarter sales in line with market expectations, citing continued brand momentum across its regions and channels.
Lufthansa (ETR:LHAG) reported quarterly profits slightly above expectations on the back of robust travel demand this summer, with the German carrier stating bookings remained strong ahead of the busy Christmas holiday season.
Zalando (ETR:ZALG) reported weaker than expected third-quarter revenue, and Europe’s biggest online fashion retailer saw continued pressure on demand for the rest of the year, expecting 2023 sales to decline.
Crude snaps three-day fall after Fed decision
Oil prices rebounded Thursday, snapping a three-day decline, after the Fed kept interest rates on hold, hitting the dollar and helping risk appetite return to financial markets.
By 03:00 ET, the U.S. crude futures traded 1% higher at $81.21 a barrel, while the Brent contract climbed 0.9% to $85.39 a barrel. Both benchmarks settled at their multi-weeks lows in the previous session, having dropped around 10% in October.
Markets largely traded past U.S. inventory data, with official data from the Energy Information Administration showing a slightly smaller-than-expected build in oil inventories over the week to October 27.
Distillate inventories saw a smaller-than-expected decline, while gasoline inventories saw an unexpected, albeit limited build.
