Final hours! Save up to 55% OFF InvestingProCLAIM SALE

European stock futures higher; U.K. inflation slows ahead of Fed decision

Published 20/09/2023, 04:14 pm
© Reuters
EUR/USD
-
DE30
-
GC
-
LCO
-
UK100
-
CL
-
F40
-

Investing.com - European stock markets are expected to open higher Wednesday, as investors digest a slowing in U.K. inflation ahead of the latest monetary policy decision by the U.S. Federal Reserve.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.2% higher, CAC 40 futures in France climbed 0.2% and the FTSE 100 futures contract in the U.K. rose 0.3%. 

U.K. headline inflation retreats in August

Data released earlier Wednesday showed that U.K. consumer inflation rose 0.3% on the month in August, with the year-on-year headline figure unexpectedly falling to 6.7% from 6.8% in July. 

Higher energy prices had been expected to prompt a jump to 7.0%, and while the Bank of England is still widely expected to announce another 25-basis-point increase in interest rates when it meets on Thursday, slowing growth could mean that the U.K. central bank also signals that the end of its rate-hiking cycle is not far away.

Fed rate decision looms large

However, attention Wednesday is more likely to be on the U.S. Federal Reserve, which completes its two-day policy-setting meeting later in the session.

The U.S. central bank is widely expected to keep interest rates steady at a range of 5.25% to 5.50% after raising them at 11 of its past 12 meetings in a bid to cool inflation. 

But uncertainty reigns over what the Fed will do in following meetings this year, especially as rising energy prices threaten to lead to an unwelcome return of elevated inflation.

The People’s Bank of China, earlier Wednesday, held its benchmark loan prime rates at record lows, as it attempted to strike a balance between supporting an economic recovery and stemming further weakness in the yuan. 

Crude falls despite large U.S. drawdown

Oil prices fell Wednesday, retreating from 10-month highs, as markets digested a forecast of a large drawdown in U.S. crude inventories ahead of the Federal Reserve interest rate decision.

Data from the industry body American Petroleum Institute, released on Tuesday, indicated that U.S. crude inventories fell by over 5 million barrels last week. The official data is due later on Wednesday. 

Yet, despite this hefty draw, traders are taking some profit ahead of the crucial Fed decision after worries of a substantial supply deficit this year had sent prices soaring to their highest levels since November last year.

By 02:00 ET, the U.S. crude futures traded 0.9% lower at $89.67 a barrel, while the Brent contract dropped 1% to $93.42. 

Additionally, gold futures fell 0.1% to $1,952.55/oz, while EUR/USD traded 0.1% higher at 1.0686.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.