European markets set for higher open after Powell hints at Fed rate cut

Big 5

European markets look set to open higher Thursday morning after U.S. Federal Reserve Chairman Jerome Powell signaled that the central bank could cut interest rates imminently.

The FTSE 100 is seen climbing around 24 points to 7,555, the DAX is expected to open around 49 points higher at 12,422 and the CAC 40 is set to rise around 21 points to 5,589, according to IG data.

Powell told the House Financial Services Committee in a prepared testimony on Wednesday that the central bank will “act as appropriate” to sustain expansion as “crosscurrents” are weighing on the economic outlook.

Asian markets rose in Thursday afternoon trade, all major indexes advancing with Hong Kong’s Hang Seng index and South Korea’s Kospi leading gains.

Investors will also keep an eye on the Bank of England’s Financial Stability Report, due at 10.30 a.m. CET on Thursday, along with U.S. core inflation data due at 1.30 p.m. CET.

U.S. Trade Representative Robert Lighthizer said on Wednesday that President Donald Trump has ordered a probe into whether France’s planned “digital services” tax is an unfair trade practice that targets U.S. tech giants.

Meanwhile in Europe, a diplomatic spat between traditional transatlantic allies took its toll as the British ambassador to Washington quit on Wednesday, following days of Twitter ire from President Trump over his branding of the White House as “inept.”

In corporate news, Deutsche Bank shareholders will have the opportunity to grill CEO Christian Sewing on how he plans to deliver on the German lender’s revenue growth targets during a global roadshow. Sewing is seeking shareholder backing for a massive 7.4 billion euro ($8.4 billion) restructuring program.

Swiss Re has suspended the $4.1 billion IPO (initial public offering) of its U.K. life insurance business due to market conditions, while Societe Generale faces a $792 million lawsuit from the family of the former owners of a Cuban bank seized by Fidel Castro’s government almost six decades ago. The heirs claim the French bank owes damages for circumventing U.S. sanctions against Cuba.

The boss of Ryanair warned on Wednesday that the prolonged grounding of Boeing’s 737 MAX may weigh on the airline’s growth plans into next summer if the airplane is not flying again by November.

Source: CNBC

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