European stocks are likely to open higher on Tuesday as the focus shifts to a two-day policy meeting of the U.S. Reserve that gets underway later today.
The U.S. central bank is all set to raise interest rates by 75 basis points, but investors will look for any signals the Fed may want to slow down the pace of rate hikes in the future given a weakening economic backdrop.
Apart from the Fed’s rate decision, Thursday’s Bank of England meeting and the all-important U.S. jobs data on Friday also remain on investors’ radar.
Earlier today, the Reserve Bank of Australia raised its target cash rate by 25 basis points, but hiked its inflation forecast and trimmed its GDP outlook.
Asian stocks traded mostly higher, and the dollar eased on improved risk sentiment, while oil prices rose after falling overnight on data showing oil output in the United States climbed to nearly 12 million barrels per day in August, the highest since the onset of the Covid-19 pandemic.
China’s manufacturing activity continued to shrink in October, albeit at a slower pace, as Covid-19 outbreaks and consequent tightening of prevention measures dampened production and demand, a survey showed earlier today.
The Caixin manufacturing Purchasing Managers’ Index rose to 49.2 in October from 48.1 in the previous month, data from S&P Global showed.
U.S. stocks drifted lower overnight as investors weighed an impending rate hike against solid earnings results.
The Dow dipped 0.4 percent but posted a monthly gain of 14 percent, notching its best month of October on record. The S&P 500 shed 0.8 percent and the tech-heavy Nasdaq Composite gave up 1 percent.
European stocks closed broadly higher on Monday despite weak Eurozone inflation and GDP data. The pan European Stoxx 600 gained 0.4 percent.
The German DAX finished marginally higher and the U.K.’s FTSE 100 added 0.7 percent while France’s CAC 40 index slipped 0.1 percent.
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