European Stock Futures Lower; Fed Hike Sets Tone for BOE, SNB

By Peter Nurse

Investing.com - European stock markets are expected to open lower Thursday as investors digest another large interest rate hike by the U.S. Federal Reserve, ahead of a series of regional central bank meetings.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France dropped 0.4%, and the FTSE 100 futures contract in the U.K. fell 0.3%.

The U.S. central bank lifted rates by 75 basis points at the end of its two-day meeting on Wednesday as widely expected. However, the Fed also signaled that its policy rate would rise by 4.4% by year-end and top out at 4.6% by the end of 2023, a steeper and longer trajectory than markets had priced in.

Fed Chair Jerome Powell said the central bank is now willing to risk weakness in the economy as it moves to rein in inflation. This slowdown is likely to have a wider impact given the U.S. economy’s role as a major global growth driver.

Other major central banks are also expected to hike rates later Thursday to curb high inflation, with the Bank of England, the Swiss National Bank, and the Norges Bank in Norway all scheduled to hold meetings today.

The European Central Bank raised its interest rates by 75 basis points last week, and will need to continue doing so despite slowing growth as inflation is too high, said European Central Bank board member Isabel Schnabel earlier Thursday.

On the flip side, the Bank of Japan decided to stick with its ultra-loose monetary policy earlier Thursday, remaining committed to supporting its economy even as its inflation rises.

The main economic data release in Europe Thursday will be consumer confidence figures for the Eurozone, which are expected to show a deterioration in September to -25.8, from -24.9 in August.

In corporate news, Credit Suisse (SIX:CSGN) is likely to be in the spotlight Thursday after the Financial Times reported that the Swiss lender has drawn up plans to split its investment bank in three, looking to sell profitable units in order to prevent a damaging capital raise after three years of relentless scandals.

Oil prices edged higher Thursday, rebounding after falling to near two-week lows during the previous session as a combination of inventory stock builds, a tightening monetary policy, and a stronger dollar weighed.

U.S. crude inventories rose by 1.1 million barrels last week, according to data from the Energy Information Administration. Additionally, the hawkish stance of the Federal Reserve raised fears of a global recession while also lifting the dollar to a 20-year high, making crude more expensive for foreign buyers.

By 02:00 ET, U.S. crude futures traded 0.6% higher at $83.41 a barrel, while the Brent contract rose 0.6% to $90.34. Both contracts fell more than 1% on Wednesday, and are on track for the first quarterly loss in more than two years.

Additionally, gold futures fell 0.4% to $1,669.60/oz, while EUR/USD edged lower to 0.9835.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network
  • London Office
    One Financial Markets 

    1 Finsbury Market
    London
    EC2A 2BN
    United Kingdom


    T:  + 44 ( 0 ) 203 857 2000
    E:  info@ofmarkets.com
  • Dubai Office
    One Financial Markets 
    OT19-39 Central Park Tower
    Dubai International Finance Centre
    Dubai
    United Arab Emirates
     
    T: + 00 971 44 22 888
    E:  info@ofmarkets.com
     

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: