Traders Await FOMC Guidance – Europe Market Wrap

Prior to today’s Federal Reserve meeting, Treasury bonds and US equities futures remained stable.

The benchmark index for Europe fell as much as 0.4% before reversing course and trading flat, while S&P 500 futures saw no movement following a new high on Tuesday. Intel had a 4.4% increase in premarket trading following its almost $20 bln in grant and loan wins from the US government.

In other markets, the focus was firmly on the path for US interest rates. Although a hold is anticipated from the central bank, investors will be analysing the commentary to determine when an easing may begin. The choice and the financial projections will be made public.

Separately, the pound fluctuated when the UK’s inflation rate fell more sharply than predicted. The BoE meets to discuss interest rates on Thursday, but a change is unlikely since policymakers say they need more evidence that pricing pressures will go back permanently.

As a result of expectations that the Bank of Japan will maintain its accommodating monetary policy even after it abolished the world’s last negative interest rate regime this week, the value of the yen fell to its lowest point versus the euro since 2008.