European stocks are expected to open higher on Thursday as global markets react to the US Federal Reserve’s latest statements in which it said it was not yet ready to cut monetary stimulus.
Britain’s FTSE would open 25 more points to 7,101, German DAX 71 more points to 15,561, French CAC 40 27 points to 6,657 and Italian FTSE MIB 97 points more to 25,490, according to the data. IG.
European stocks are expected to follow their US counterparts with a strong rally after the Federal Reserve said on Wednesday it did not anticipate an imminent pullback in the monetary stimulus that has supported the economy throughout the pandemic.
“If progress continues overall as planned, the Committee considers that a moderation in the pace of asset purchases could soon be justified,” said the Fed’s statement after the meeting, however. The central bank has bought $ 120 billion per month in treasury bills and mortgage-backed securities since the start of the Covid crisis.
The Federal Open Market Committee voted unanimously on Wednesday to keep short-term rates near zero and was still divided on the timing of the first interest rate hike. The dot plot of Wednesday’s projections showed that nine of the 18 FOMC members expect a rate hike in 2022, compared to seven in the Fed’s June projections.
Asia-Pacific stocks were mostly higher in trading on Thursday, as investors in Asia-Pacific continued to monitor the situation surrounding China Evergrande Group.
Shares of China Evergrande group in the city jumped more than 12%, slashing some gains after climbing more than 20% earlier. It was also after days of losses – although its drop since the start of the year is still over 80%.
European markets will keep a close eye on Eurozone composite PMI flash data on Thursday for a picture of the region’s economic health.
Attention will also be drawn to the Bank of England as it announces its latest monetary policy decision. Other data released includes Spanish and Dutch gross domestic product for the second quarter and data on the business climate in France for September.
In terms of profits, Superdry publishes its preliminary annual results and Royal Mail publishes a trade update in July and August.
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– CNBC’s Yun Li, Tanaya Macheel and Eustance Huang contributed to this market report.