European stocks are seen opening higher on Thursday after the Federal Reserve laid out a roadmap for tapering pandemic-era stimulus, as widely expected, but indicated that interest rate hikes will not come anytime soon.
In another development, the European Central Bank (ECB) is “very unlikely” to raise interest rates next year as inflation remains too low, its President Christine Lagarde said on Wednesday, pushing back on market bets for a move as soon as next October.
Focus now shits to the Bank of England’s policy meeting later in the day, where the central bank is expected to either raise interest rates for the first time since the onset of the coronavirus pandemic or say that a hike is imminent to contain inflation.
Gold bounced back from a three-week low helped by a softer dollar, while oil extended overnight declines after Iran and world powers agreed to resume nuclear talks later in the month.
Asian markets traded mostly higher, with strong readings on U.S. services and private sector employment underpinning investor sentiment.
U.S. reports on weekly jobless claims, trade balance and labor productivity may attract attention later today ahead of the all-important non-farm payrolls data, due to be released on Friday.
Economists expect employment to jump by 425,000 jobs in October after an increase of 194,000 jobs in September. The unemployment rate is expected to edge down to 4.7 percent from 4.8 percent.
Closer home, it’s a busier day ahead on the Eurozone’s economic calendar, with reports on German factory orders and finalized services and composite PMI figures likely to sway market sentiment.
U.S. stocks rose overnight to reach new record closing highs after the Fed announced its widely expected decision to begin tapering its bond purchases in November with plans to end them in 2022.
In his post-meeting press conference, Fed Chair Jerome Powell stressed that the end of the bond buying would not mean a rush to raise interest rates.
Earlier in the day, upbeat private payrolls and service sector activity data painted a positive picture of the world’s largest economy.
The Dow edged up 0.3 percent, the S&P 500 gained 0.7 percent and the tech-heavy Nasdaq Composite rallied 1 percent.
European stocks ended broadly higher on Wednesday after a cautious session. The pan European Stoxx 600 gained 0.4 percent.
The German DAX ended marginally higher and France’s CAC 40 index inched up 0.3 percent while the U.K.’s FTSE 100 dropped 0.4 percent.
Business News
European Shares Seen Up As Fed Confirms Tapering Plans
2021-11-04 05:41:28
