European stock markets experienced slight gains on Wednesday as investors navigated through disappointing U.K. growth data in anticipation of the Federal Reserve’s final policy-setting meeting of the year.
As of 03:20 ET (08:20 GMT), the DAX index in Germany edged 0.1% higher, the CAC 40 in France saw a 0.1% uptick, and the FTSE 100 in the U.K. rose by 0.1%.
Global stock markets have enjoyed a positive trend in December, with gains of approximately 1% for the month so far. This surge is attributed to growing expectations that major central banks worldwide have concluded their prolonged hiking cycles.
The Federal Reserve is expected to keep rates unchanged in its two-day policy meeting conclusion later on Wednesday. All eyes will be on Chair Jerome Powell’s remarks on current conditions and the central bank’s dot plot of future policy, particularly following Tuesday’s U.S. inflation data.
Market analysts are now predicting a strong likelihood of a rate cut in the summer. Over the weekend, Goldman Sachs adjusted their forecast for the first rate cut from the fourth quarter of next year to the third quarter.
Following the Fed, the European Central Bank, the Bank of England, the Swiss National Bank, and Norges Bank will all make policy decisions on Thursday.
In economic news, the U.K. economy contracted in October, with gross domestic product falling by 0.3% from September. This marks the first monthly shrinkage since July and raises concerns about the possibility of a recession.
Inditex (BME:ITX), the world’s largest fashion retailer, reported a 0.5% increase in its stock after revealing a one-third jump in net profit for the February-October period. However, sales growth during this time frame slowed compared to the previous year amid challenging conditions for consumers.
Oil prices declined on Wednesday, continuing the previous session’s sharp losses due to oversupply and concerns about demand growth. U.S. crude futures traded 0.6% lower at $68.20 a barrel, while the Brent contract dropped 0.7% to $72.74 a barrel by 03:20 ET. Both benchmarks experienced over a 3% drop on Tuesday, reaching six-month lows.
The unexpected uptick in U.S. inflation readings for November, released on Tuesday, has tempered expectations for early interest rate cuts by the Fed. The official inventory data from the Energy Information Administration is expected later in the day.
Gold futures saw a 0.1% increase to $1,995.05/oz, while EUR/USD traded marginally lower at 1.0791. Investors continue to monitor various economic indicators and central bank decisions for cues on the market’s future direction.