Equities Rebound Before Fed – Europe Market Wrap

Global stocks rose on Wednesday as investors awaited the Federal Reserve’s final policy decision for the year.

Futures futures for the S&P 500 and Nasdaq 100 rose 0.2% after both measures fell on Tuesday. The Stoxx 600 was expected to see its first day of advances in five sessions. Asian equities were firm, ending a three-day losing trend.

While a quarter-point Fed interest-rate drop is virtually fully priced in for Wednesday, investors will be focused on the forecast for 2025, as inflation slows more slowly than expected and the economy remains strong. The potential impact of significant policies implemented by President-elect Donald Trump’s administration adds to the uncertainty.

Last quarter, the Fed’s so-called dot plot predicted a full percentage point of rate decreases in 2025, following a similar level of easing this year. Money markets are currently pricing in a decrease on Wednesday, followed by less than two 25 basis-point reductions next year.

Commerzbank climbed when UniCredit announced that it had increased its shareholding in the German lender. Nissan’s shares in Japan rose the most since at least 1974 on news that the struggling automaker is considering a merger with Honda. Renault, Nissan’s largest shareholder, increased as much as 7.4% in Paris.

UK CPI YoY Actual 2.6% (Forecast 2.6%, Previous 2.3%) [GBP weakened].

Traders add to BoE easing bets after UK CPI, seeing 60 BPS in 2025.