© Reuters.
By Peter Nurse
Investing.com – European stock markets are expected to open lower Wednesday, as investors braced for another hefty interest rate hike by the U.S. Federal Reserve, likely curbing growth in the world’s largest economy.
At 02:00 ET (06:00 GMT), the contract in Germany traded 0.4% lower, in France dropped 0.3%, and the contract in the U.K. fell 0.2%.
The market’s focus is squarely on the U.S. central bank Wednesday, as it concludes its latest policy-setting meeting later in the session.
The is widely expected to hike interest rates by at least 75 basis points following last week’s hotter-than-expected reading, but some are also pricing in the of a 100 bps hike.
The decision is due at 14:00 ET (18:00 GMT), and the Fed will also update its quarterly economic projections, which should provide guidance over where the policymakers think interest rates are heading, how long it will take inflation to fall, and the likely impact on economic growth along the way.
While the Fed headlines the week, the , the , the , and the in Norway are also announcing policy decisions this week.
Sweden’s started the ball rolling, surprising with a full percentage-point hike on Tuesday, and warned of more to come over the next six months.
The European economic data slate is largely empty Wednesday, although the survey should show a deterioration of business confidence in the U.K. in September.
In corporate news, Novartis (SIX:) announced plans to ask the U.S. Supreme Court to uphold the validity of a patent for the multiple sclerosis drug Gilenya after suffering a setback in a federal appeals court ruling.
The mining sector will also be in focus after Rio Tinto (LON:) CEO Jakob Stausholm warned that prices are likely to face short-term pressure from steep inflation and supply chain disruptions.
Oil prices stabilized Wednesday, after the previous session’s selling, ahead of another inflation-tackling interest rate hike which is likely to stunt economic growth and suppress the demand for crude.
U.S. crude stocks rose by about 1 million barrels last week, data from the showed on Tuesday, indicating some weakness in demand among U.S. consumers. Gasoline inventories also rose, by about 3.2 million barrels. Official data from the are due later in the session.
By 02:00 ET, futures traded 0.3% higher at $84.16 a barrel, while the contract rose 0.3% to $90.92. Both contracts fell more than 1% on Tuesday, and are on track for the first quarterly loss in more than two years.
Additionally, rose 0.2% to $1,693.75/oz, while traded 0.2% lower at 0.9952.
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