European stock markets are poised to rise as the Federal Reserve remains in the spotlight.
European stocks are expected to rise on Wednesday, as investors anticipate the U.S. Federal Reserve's commentary on inflation and interest rates.
On Tuesday, the regional index closed in the red, ending a strong run that had lasted since the global sell-off from Aug. 1-5.
The CAC 40 in France, the FTSE 100 in the U.K., and the DAX in Germany all experienced gains, with the CAC 40 rising by 7 points to 7,490, the FTSE 100 increasing by 4 points, and the DAX gaining 10 points.
The euro area's flash purchasing managers' index figures will be the only significant data release this week on the European front.
The focus is shifting to the US, with the release of Federal Reserve minutes on Wednesday and Fed Chair Jerome Powell's speech at the highly anticipated central bank symposium in Jackson Hole on Friday.
The probability of a 25 basis point interest rate cut by the Fed in September, as indicated by CME's FedWatch tool, is 67.5%, while the probability of a 50 basis point cut is 32.5%. Despite markets having fully priced in the interest rate cut, sentiment is uncertain about the exact amount of the cut.
Powell's words will be scrutinized for a more hawkish or dovish tone, as he is not expected to provide clear direction on the future path.
Amid ongoing discussions about the condition of the U.S. economy, the latest U.S. retail sales and weekly initial jobless claims figures have exceeded expectations.
If you consider the distance from Goldilocks, we have inflation that is decreasing, economic growth that is still stable but showing signs of weakness, a good earnings season, and the Fed being close to reducing interest rates, Charles-Henry Monchau, chief investment officer at Bank Syz, stated on CNBC's "Squawk Box Europe" on Wednesday.
Monchau stated that despite the presence of risks, the conditions for equity markets remain favorable, with a decent headline.
In Wednesday trade, the Asia-Pacific markets generally experienced a decline, mirroring the previous day's losses on Wall Street.
Markets
You might also like
- Powell hints at additional rate cuts, but emphasizes that the Fed is not following a predetermined path.
- Jerome Powell, the Federal Reserve Chair, will deliver a live speech on his views on the economy and policy.
- The FTC has approved the Chevron-Hess merger, but has barred John Hess from serving on the board.
- In 16 years, China stocks experienced their best day, causing U.S. ETFs to surge.
- In September, the U.S. is on track to experience its third consecutive monthly decline in crude oil.