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Title: European Stock Futures Mixed; Fed Rate Decision Prompts Caution

May 04, 2022 01:57AM ET

By: AnalysisWatch

European stock markets are expected to open cautiously Wednesday ahead of the conclusion of the Federal Reserve's latest policy meeting, as investors anticipate the biggest interest rate hike since 2000.

At 2 AM ET, DAX futures in Germany traded 0.2% lower and CAC 40 futures in France fell 0.2%, while FTSE 100 futures in the U.K. rose 0.1%.

The U.S. Federal Reserve is expected to raise interest rates by half a percentage point at 2 p.m. ET and announce the start of the reduction of its $9 trillion balance sheet to boost efforts to curb rapidly rising inflation.

In addition to the rate decision itself, Fed Chairman Jerome Powell's press conference 30 minutes later will be closely watched for clues as to how far and how fast the central bank is prepared to raise rates, especially since the next Fed meeting is not until June.

Global equity markets experienced a very weak April on concerns that central banks, and the Fed in particular, would aggressively raise interest rates due to rising inflation, which would hurt future economic growth.

Corporate earnings will also be in focus on Wednesday.

German medical equipment maker Siemens Healthineers raised its fiscal 2022 targets on increased demand for COVID-19 rapid antigen tests, while Norwegian energy giant Equinor reported record pretax profits for the first quarter as the war in Ukraine sent natural gas prices to an all-time high.

Danish jewelry maker Pandora reported better-than-expected first-quarter sales on Wednesday and raised its full-year revenue forecast slightly.

Quarterly results from companies including UniCredit, Enel, Fresenius, and TeamViewer are also due Wednesday.

On the data front, final April PMI readings for the eurozone and retail sales for March are due.

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