European Stocks Rise as Fed Boost Rates Since 2018
European stocks rose on Wednesday. Investors were waiting for the expected decision of the U.S. Federal Reserve on interest rate policy. The FTSE 100 grew by 1.3%. CAC increased by 2.1%. The DAX was up 2%. All are firmly focusing on the Federal Reserve, where interest rate increases should come in the first four years. If this fails, further volatility might occur in the European and U.K. markets.
It is also worth noting that Russia’s invasion of Ukraine means that the frequency and scale of the increase in rates may not be as high as previously predicted. The upbeat mood also comes amid new signs that talks to end the conflict in Ukraine could be even closer. Meanwhile, traders are also watching for Russia’s prospect of imposing a bond payment.
The $117 million interest payment is paid on U.S. bonds that Russia said it would pay in rubles; This will cause a potential default. However, he will still have a 30-day grace period on paying the coupon. In the U.S., S&P 500 futures rose 0.9%. Dow futures rise 0.7%. Nasdaq futures were up 1.3% as soon as they started trading in Europe.
On Tuesday, U.S. markets managed to end the session sharply higher, where the S&P 500 ended for the first time since last Wednesday.
Stocks and Fed Meeting
The latest U.S. retail sales report for February will be released later in the session. Sales expectations for February will increase by 0.4%. Retail sales in the U.S. rose sharply in January, following a 1.9% decline in December. January retail sales showed that, despite weak consumer confidence, spending recovered at the fastest pace in 10 months; In total, it increased by 3.8%. This is much higher than the 2% expectation. The most significant gains were online sales and furniture, cars, and building materials.
Asian stocks rose on Wednesday. The Nikkei is up 1.6% in Japan. The Hang Seng grew more than 9% after falling in Hong Kong earlier in the week. Shanghai Composite rose 3.5%. The action came after Beijing pledged its policies to strengthen financial markets and stimulate economic growth.