By Peter Nurse
Investing.com – European stock markets are expected to open a bit lower on Wednesday as investors cautiously wait for the Federal Reserve for advice on the economy.
At 2:05 am ET (0605 GMT), the contract in Germany was down 0.1%, in France was down 0.3%, while the UK contract underperformed, down 1.0%, 1%, canceling out Tuesday’s oversized gains.
Stock markets have largely recovered their position after last week’s turmoil, mostly around the tech sector, helped by bullish economic data from China and the United States, the world’s two largest economies. Recent news from Europe has also been encouraging, with Germany – the first of the big sentiment gauges released this month – defying expectations of a fall.
Investors are looking to central banks for how to do it, and in particular the US Federal Reserve which concludes Wednesday two days later, the first since taking a more tolerant stance on inflation in August.
The focus of the meeting “will be the operational consequences of average inflation targeting,” wrote Martin Lund of Nordea, in a note. “As the Fed needs to show full commitment to AIT, we see a clear risk of increasing the current pace of QE.”
The Fed is expected to announce its decision at 2 p.m. ET (6 p.m. GMT), followed by President Jerome Powell.
The and also announce their respective political decisions on Thursday.
Economic data in Europe focuses on UK inflation figures on Wednesday, with the country climbing 0.2% year-on-year in August, slightly better than the widely expected 0.1%.
In the company news, ENI (MI 🙂 will be at the center of concerns after Italy’s oil and gas major announced Tuesday evening that it has agreed to pay an interim dividend for 2020.
Additionally, Geberit (SIX 🙂 said on Wednesday it was set to start a buyback program worth up to CHF 500 million, starting Thursday and lasting up to two years.
Oil prices rose on Wednesday after the American Petroleum Institute detailed a sharp drop in the United States and Hurricane Sally continued to disrupt offshore production in the Gulf of Mexico.
API recorded a draft of 9.5 million barrels for the week ending 9/11, against a forecast of a build of 2 million. The US Energy Information Administration is due to release its later today.
futures contracts rose 1.5% to $ 38.87 a barrel, while the international benchmark contract rose 1.3% to $ 41.06. The two benchmarks increased by more than 2% during the previous session,
Elsewhere, it rose 0.1% to $ 1,966.65 / oz, while it traded widely at 1.1843.
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