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European stocks respond to Fed, BOJ, BOE meetings



European equities are expected to open lower on Thursday as investors around the world react to the recent US Federal Reserve meeting.

London’s FTSE is seen 36 points lower at 6,043, Germany’s DAX 112 points lower at 13,121, France’s CAC 40 down 42 points at 5,022 and Italy’s FTSE MIB 206 points lower at 19,745, according to IG.

European markets will follow their counterparts in Asia and the US lower as traders digested the Federal Reserve̵

7;s promise to keep interest rates low for the next few years.

Members of the Federal Open Market Committee indicated that the US interest rate could remain anchored at zero-tied through 2023 as the central bank tries to spur inflation. In a statement, the committee said: “When inflation persists below this long-term target, the Committee will aim to achieve inflation moderately above 2% for some time, so that inflation averages 2% over time.”

Usually, the prospect of lower interest rates over a longer period encourages the purchase of shares. However, that was not the case on Wednesday. The S&P 500 and Nasdaq both closed lower, and the Dow ended well away from its session high.

Meanwhile in Japan, the Bank of Japan kept monetary policy stable on Thursday. In its monetary policy statement, the BoJ said the Japanese economy has begun to recover but remained in “a serious situation” due to the impact of the coronavirus pandemic at home and abroad.

In Europe, investors will be keeping an eye on the Bank of England’s policy guidance, which will also meet on Thursday. No changes in the bank’s cash position are expected today.

On the earnings front, retailers Next and John Lewis Partnership publish interim results, and Kier publishes preliminary results for the full year.

– CNBC’s Eustance Huang and Fred Imbert contributed reporting to this story.


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