European Stocks Approach Record Highs

Swiss stocks closed in the red on Wednesday, with the Swiss Market Index down 0.16%, as markets await the US central bank's monetary policy decision.

The US Federal Reserve is widely expected to maintain its key interest rate in the 4.25% to 4.5% range.

"Today brings the Federal Reserve's second policy decision of 2025 and their latest Summary of Economic Projections. For the headline decision, we expect the Fed to hold rates steady and, given heightened uncertainty, provide limited guidance about the policy path ahead," analysts at Deutsche Bank Research said. "And in a closer call, our US economists expect the Fed to announce a pause in QT beginning in April, coupled with forward guidance indicating that QT should resume once the debt ceiling is resolved."

In the euro area, the annual inflation rate declined to 2.3% in February from 2.5% in January, while core inflation rate declined to 2.6% from the previous 2.7%, according to Eurostat's final data.

Over to corporates, Swiss railway rolling stock manufacturer Stadler Rail slipped 2.98% as it reported a year-over-year drop in 2024 group profit to 55 million francs from 138.6 million francs. Sales also fell over the period to 3.3 billion francs from 3.6 billion francs, impacted by delivery delays that resulted from environmental disasters, with 350 million francs in sales postponed to 2025 and 2026.

Meanwhile, Temenos is set to open a new innovation hub in Florida, US, as part of its expansion plans in the country. It intends to hire 200 technology and product developers. The banking software and technology company's shares edged up 0.71% at closing.

Germany's DAX index closed 0.3% lower, ending a three-day winning streak.

Investors responded to Germany's historic policy reform and updates on the Ukraine ceasefire, while awaiting key monetary policy decisions.

The drop followed a vote by lawmakers to reform public borrowing rules, enabling higher national defense spending.

German defense stocks declined, with Rheinmetall down more than 4% and Brenntag dropping almost 2%.

Automotive stocks also fell, with Volkswagen, BMW, Mercedes-Benz, and Daimler Truck losing 1.4% to 2.5%.

Commerzbank dropped over 3%.

Mortgage applications in the US dropped last week as rates increased for the first time in nine weeks, driving down refinance activity, the Mortgage Bankers Association said Wednesday.

The market composite index, which measures loan application volume, fell 6.2% on a seasonally adjusted basis for the week ended March 14, following a gain of more than 11% the week prior. Without adjustments, the index decreased 6% last week.

The refinance index dropped 13% from the week before, but jumped 70% on an annual basis.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances of $806,500 or less advanced to 6.72% from 6.67% a week ago. For loan balances higher than that amount, the rate climbed to 6.78% from 6.68%. For 15-year loans, the rate rose to 6.08% from 6.04% week over week.

Fixed-rate mortgages with 30-year terms backed by the Federal Housing Administration grew to 6.4% from 6.34%. The share of FHA loans, which are often used by first-time home buyers and can involve smaller down payments, inclined to 16.5% of total applications from 16.1% the week before.

The seasonally adjusted purchase index edged up 0.1% on a weekly basis. Purchase application volume "inched up to its highest level" in six weeks, driven by a 3% gain in the FHA component, MBA Chief Economist Mike Fratantoni said. On an unadjusted basis, the index increased 1% sequentially and 6% annually, the report showed.

"Overall, purchase application volume is up 6% compared to last year at this time," Fratantoni said. "Growing inventories of homes on the market and steadier mortgage rates are supporting homebuying activity thus far this spring."

On Tuesday, government data showed that housing starts in the US jumped more than expected in February. The National Association of Home Builders and Wells Fargo reported earlier in the week that homebuilder confidence dropped in March to the lowest in seven months amid tariff and macroeconomic headwinds.

Mortgage applications in the US dropped last week as rates increased for the first time in nine weeks, driving down refinance activity, the Mortgage Bankers Association said Wednesday.

The market composite index, which measures loan application volume, fell 6.2% on a seasonally adjusted basis for the week ended March 14, following a gain of more than 11% the week prior. Without adjustments, the index decreased 6% last week.

The refinance index dropped 13% from the week before, but jumped 70% on an annual basis.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances of $806,500 or less advanced to 6.72% from 6.67% a week ago. For loan balances higher than that amount, the rate climbed to 6.78% from 6.68%. For 15-year loans, the rate rose to 6.08% from 6.04% week over week.

Fixed-rate mortgages with 30-year terms backed by the Federal Housing Administration grew to 6.4% from 6.34%. The share of FHA loans, which are often used by first-time home buyers and can involve smaller down payments, inclined to 16.5% of total applications from 16.1% the week before.

The seasonally adjusted purchase index edged up 0.1% on a weekly basis. Purchase application volume "inched up to its highest level" in six weeks, driven by a 3% gain in the FHA component, MBA Chief Economist Mike Fratantoni said. On an unadjusted basis, the index increased 1% sequentially and 6% annually, the report showed.

"Overall, purchase application volume is up 6% compared to last year at this time," Fratantoni said. "Growing inventories of homes on the market and steadier mortgage rates are supporting homebuying activity thus far this spring."

On Tuesday, government data showed that housing starts in the US jumped more than expected in February. The National Association of Home Builders and Wells Fargo reported earlier in the week that homebuilder confidence dropped in March to the lowest in seven months amid tariff and macroeconomic headwinds.

The European stock markets were moving mixed in Wednesday trading as The Stoxx Europe 600 rose 0.15%, Germany's DAX was down 0.50%, the FTSE 100 in London was up 0.03%, France's CAC 40 increased 0.64%, and the Swiss Market Index was off 0.01%.

The annual inflation rate in the euro area declined to 2.3% in February from 2.5% in January, and 2.6% a year earlier, according to Eurostat, the statistical office of the European Union. Meanwhile, annual inflation in the EU declined to 2.7% in February from 2.8% both the previous month and a year earlier.

The lowest annual rates were in France (0.9%), Ireland (1.4%) and Finland (1.5%), while the highest annual rates were in Hungary (5.7%), Romania (5.2%) and Estonia (5.1%). Compared with January, annual inflation fell in 14 member countries, rose in seven, and remained unchanged in six.

The European Union's European Commission said Tuesday that preliminary findings show two of Alphabet's services do not comply with the Digital Markets Act. Separately, the Commission also said Tuesday it has adopted two decisions under the DMA specifying requirements Apple must meet in order to comply with its interoperability obligation.

The European Union is set to tighten steel import quotas to reduce inflows by an additional 15% beginning next month to prevent cheap steel from flooding its market, Reuters reported Wednesday, citing European Commission executive vice-president Stephane Sejourne. "During a period when nobody is respecting WTO rules and everyone refers to national security ... the EU can't be the only continent that lets its industry fall apart," Sejourne told Reuters.

And in corporate news, UBS Group is closing its outsourced trading desk, multiple media outlets reported Wednesday. The company has started notifying its clients about the closure, giving them a three-month window to find a new provider, Bloomberg reported, citing sources familiar with the matter. UBS did not immediately reply to a request for comment from MT Newswires.

ArcelorMittal is nearing a deal with the South African government to secure funding for its local unit and keep its steel mills running, Bloomberg reported Tuesday, citing sources familiar with the matter. The government plans to provide an initial 500 million rand ($27.57 million) to pay steelworkers for the next six to eight months, the media outlet reported. ArcelorMittal and IDC did not immediately respond to requests for a comment from MT Newswires.

Telecommunications company VEON said Wednesday that its Kyivstar unit has agreed to buy a 97% stake in Ukrainian ride-hailing and delivery company Uklon for $155.2 million. VEON said it expects Uklon Chief Executive Serhii Hryshkov to remain in his role.

The Ibovespa climbed 0.9% on Wednesday, surpassing the 132,620 mark and reaching its highest level since October 2, as investors anticipated interest rate decisions in Brazil and the US and their impact on the real.

In Brazil, the central bank is expected to hike the benchmark interest rate by another 100 basis points to 14.25%, pushing borrowing costs to their highest level since September 2016.

This comes after the country’s inflation rate surged to 5.06% in February, the highest since September 2023 and well above the central bank’s 3% target.

Meanwhile, in the US, policymakers are likely to keep interest rates unchanged, with investors closely watching their projections for economic growth, PCE inflation, and the future path of interest rates.