European Stocks Head For Negative Open As Global Markets Await Fed Decision

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Economic

Summary:

European stocks are expected to open in negative territory on Wednesday as global investors gear up for the U.S. Federal Reserve's interest rate decision.

The U.K.'s FTSE index is seen opening 0.34% lower, Germany's DAX down 0.24%, France's CAC 40 down 0.25% and Italy's FTSE MIB down 0.3%, according to data from IG.

Global markets are awaiting the outcome of the Fed's final meeting of the year on Wednesday.

The central bank is widely expected to deliver its third straight interest rate cut of a quarter percentage point, with Fed Funds futures suggesting an 87.6% chance of a decrease, according to CME's FedWatch tool.

Sentiment among members of the rate-setting Federal Open Market Committee remains divided, however, as some favor cuts to stave off further labor market weakness and others believe another cut could worsen inflation.

Investors are looking to gauge members' sentiment from the post-meeting statement and Chair Jerome Powell's highly anticipated news conference on Wednesday afternoon.

European market sentiment is likely to have taken a hit this week after U.S. President Donald Trump criticized regional leaders this week, describing them as "weak" in an interview with Politico that was published Tuesday.

Trump, who has a checkered relationship with European leaders, appearing to get on well with some — such as the U.K.'s Keir Starmer and Italian PM Giorgia Meloni — and not so much with others. In the interview, the president criticized "decaying" Europe for failing to control migration or take action on the Ukraine war.

"I think they don't know what to do," he said in the interview, adding: "Europe doesn't know what to do."

The comments will hit hard at a time when European allies are trying to make sure the continent's voice is heard in negotiations over Ukraine peace proposals. They come after Trump's new national security strategy last week questioned whether European countries can "remain reliable allies."

Earnings come from TUI on Wednesday, and data releases include Italian industrial production figures.

Source: CNBC

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European Stocks Head For Negative Open As Global Markets Await Fed Decision

Source: CNBC

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