European equity markets should open in the green pending Fed announcements. The Eurostoxx 50 opens at 4,078.26 points (+0.59%), the CAC 40 at 6,837.96 points (+0.74%), the DAX 40 at 15,123.87 points (+0.75% ), the FTSE 100 at 7,371.46 points (+1.02%), the SMI at 11,945.69 points (+0.54%), the AEX at 739.86 points (+0.16%), the BEL 20 at 4,029.86 points (+0.91%), IBEX 35 at 8,479.50 points (+0.73%), DJIA at 34,297.73 points (-0.19%), Nasdaq at 13,539.29 points (-2.28%), the S&P 500 at 4,356.45 points (-1.22%) and the Nikkei 225 at 27,011.33 points (-0.44%).
With regard to exchange rates, the variation compared to the closing in New York, EUR/USD at 1.1307 (+0.04%), EUR/JPY at 128.77 (+0, 02%) and USD/JPY at 113.89 (-0.02%).
Investors will follow this Wednesday the figures for household confidence in January and unemployment in the fourth quarter.
European equity markets are expected to open higher on Wednesday, ahead of a much-anticipated decision by the Federal Reserve (Fed) monetary policy committee. At 7:25 a.m., the CAC 40 futures contract gained 56 points, or 0.8%, according to data from broker IG Markets. The contract on the DAX 40 took 104 points, or 0.7%, and that on the FTSE 100 won 66 points, or 0.9%.
Microsoft reported net income of $18.8 billion in the second quarter of its lagged fiscal year, or $2.48 per share, from $2.03 per share a year earlier. Revenue jumped to $51.73 billion from $43.08 billion. Analysts polled by FactSet on average expected earnings per share of $2.32 and revenue of $50.71 billion. After these announcements, Microsoft action gained 1.2% in trading after the close of Wall Street. The New York Stock Exchange had previously ended lower, due to further strong selling in the technology sector. The Dow Jones index (DJIA) lost 0.2% to 34,297.73 points. The broader S&P 500 index fell 1.2% to 4,356.45 points, and the technology-dominated Nasdaq index fell 2.3% to 13,539.29 points. In Asia, equity markets presented a mixed picture on Wednesday. The Nikkei index of the Tokyo Stock Exchange closed down 0.4% and the Hang Seng of the Hong Kong Stock Exchange yielded 0.1% at the end of the session. On the other hand, the Shanghai Composite index gained 0.6%.
The yield on the ten-year US Treasury bond changed little on Wednesday morning, at 1.775% against 1.776% on Tuesday evening. Investors await the Fed's meeting and press conference, and wonder if central bankers see any reason to accelerate monetary tightening or adopt a slightly more dovish tone in order to account for the impact of the variant Coronavirus omicron.
The euro is up slightly against the dollar on Wednesday morning as markets await the outcome of the Fed's monetary policy meeting.
Crude oil futures fell Wednesday morning on fears of a Fed rate hike, Rystad Energy said. Pessimism outweighs favorable market fundamentals, adds the energy consultancy, pointing to concerns over tensions between Ukraine and Russia and the difficulties of the Organization of Petroleum Producing Countries (OPEC) and of its allies to achieve their monthly production increase targets. At 7:15 a.m., the March North Sea Brent contract lost 13 cents to $88.07 a barrel. The contract of the same maturity on light sweet crude (WTI) listed on the Nymex yielded 32 cents, at 85.28 dollars a barrel.