European equity markets are predicted to open slightly down on Wednesday, as all eyes are directed towards the awaited monetary policy update from the Federal Reserve. Although it is largely projected that the Federal Reserve will keep the interest rates unchanged, the subsequent statement and economic predictions have the potential to significantly influence the prospects for forthcoming rates.
Recent CPI and producer price data raising the alarm regarding stubborn inflation has resulted in traders pricing in less than a 50 percent chance of a rate cut in June. Adding to the economic updates, UK inflation statistics are expected later today, ahead of the Bank of England’s meeting on Thursday.
In the Asian market, stocks have mostly increased, despite circumspect trading. Japanese markets remain closed due to a holiday. In South Korea, stocks have shown strong performance, with the Kospi average boosting over 1 percent. This follows the Nikkei’s report which considers the potential of NVIDIA Corporation’s use of Samsung’s high bandwidth memory chips in its AI processors.
Concurrently, the dollar appreciated prior to the Federal Reserve meeting, as gold's value largely maintained stability. Oil prices noted a small decrease after two consecutive days of growth due to supply concerns and increased demand indications from the US and China. The most recent API report disclosed a minor decrease in crude oil stocks and gasoline inventories, with a small increase in distillate stocks.
In the US, despite an initial dip, stocks ended on a high note as Treasury yields fell across the board. NVIDIA shares increased slightly for the second consecutive day after the company revealed its new generation of AI chips. Economic data showed that housing start-ups and building permits in February exceeded expectations. The Dow rose by 0.8 percent, while the S&P 500 rose by 0.6 percent and set a new record. The tech-dominated Nasdaq Composite increased by 0.4 percent.
On Tuesday, European stocks ended slightly higher, as investors anticipated the Federal Reserve and BOE policy meetings. The STOXX 600 pan-European index, the German DAX, the UK's FTSE 100, and France's CAC 40 advanced by 0.3 percent, 0.3 percent, 0.2 percent, and 0.7 percent, respectively.
