European markets to open mixed ahead of key Fed meeting

Big 5

European markets pointed to a mixed open Wednesday ahead of a much-anticipated U.S. Federal Reserve decision on interest rates.

The FTSE 100 was seen around 7 points higher at 7,450 while Germany’s DAX was expected to open roughly flat at 12,332. France’s CAC 40 was seen down around 4 points to 5,506.

U.S. President Donald Trump on Tuesday announced plans on Twitter for an ‘extended meeting’ with Chinese President Xi Jinping at next week’s G-20 summit, sparking hopes of a resolution to the ongoing trade war between the two nations.

The G-20 summit is scheduled for June 28-29 in Osaka, Japan. Asian stocks surged Wednesday afternoon in reaction to the news, with major indexes in Hong Kong and mainland China climbing more than 2%.

The president also took aim at central bankers on Tuesday, lambasting European Central Bank (ECB) President Mario Draghi on Twitter for his proposal of more stimulus for the euro zone. Trump accused Draghi of currency manipulation after the euro fell sharply in reaction to his speech.

He then went on to leave open the possibility of demoting Federal Reserve Chairman Jerome Powell, ahead of Wednesday’s crucial monetary policy meeting. The Fed will make a decision on interest rates at 2.p.m. ET, with investors hopeful that Powell will signal a rate cut in the near future.

In the U.K., the number of Conservative party hopefuls to replace Prime Minister Theresa May was cut to five, after former Brexit Secretary Dominic Raab was eliminated in the second round of secret ballots.

Eurosceptic former Foreign Secretary Boris Johnson continued to surge ahead, with Conservative Members of Parliament (MPs) set to vote in their third leadership ballot Wednesday.

The ECB Forum concludes Wednesday with European Commission President Jean-Claude Juncker is due to speak at 9.30 a.m. BST.

The U.K. will also release a raft of economic data Wednesday morning.

Source: CNBC

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