European stocks are expected to open higher on Wednesday as investors brace themselves for the latest monetary policy announcement from the U.S. Federal Reserve.
The U.K.’s FTSE index is seen opening 69 points higher at 7,446, Germany’s DAX 81 points higher at 15,217, France’s CAC 40 up 53 points at 6,898 and Italy’s FTSE MIB 266 points higher at 26,172, according to data from IG.
The positive start expected for Europe comes after markets in the region closed higher on Tuesday, recouping some losses from Monday’s sharp sell-off as investors sifted through a fresh batch of corporate earnings.
On Wednesday, however, global investors are focused on the latest policy update from the Fed when its two-day meeting ends.
Essentially, market participants are eager to know when the central bank will raise interest rates and by how much. The Fed is expected to signal a rate hike as soon as March and more policy tightening on the table to address high inflation. An interest rate decision is slated for Wednesday at 2 p.m. ET.
Asia markets traded mixed on Wednesday as investors awaited the Fed statement while U.S. stock futures rose slightly Tuesday night, following another wild session for the market.
Geopolitical tension at the Russia-Ukraine border continued to dominate market concerns too. President Joe Biden spoke with European leaders Monday amid fears of a possible Russian invasion of Ukraine and on Tuesday, he said that he would consider imposing personal sanctions on Russian President Vladimir Putin if Russia attacked its neighbor.
Earnings in Europe come from Lonza on Wednesday, and data releases include Russian producer prices for December.
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