European markets positive as investors announce Fed decision

LONDON – European stocks are expected to open much higher on Thursday as investors in the region announce the US Federal Reserve decided on Wednesday to accelerate the reduction of monthly bond purchases.

UK FTSE The index was seen opening 61 points higher at 7,235, in Germany DAX 161 points higher at 15,651, of France CAC 40 up 99 points at 7,028, of Italy FTSE MIB 281 points higher at 26,974, according to data from IG.

Global investors will digest the US central bank’s signal on Wednesday that it will Positive in easing bond purchases and seeing some rate hikes in 2022.

The Fed will begin to slow down its asset purchases in January and buy only $60 billion in bonds each month going forward, up from $90 billion in December.

Forecasts released overnight showed Fed officials expected three rate hikes in 2022, two next year and two more in 2024.

The decision to drastically ease bond buying follows recent inflation data showing a 6.8% gain in November, which is higher than expected and the fastest since 1982.

Asia – Pacific Market Thursday was tumultuous as investors spotted signs from the Fed that their extremely easy monetary policy run since the pandemic began was drawing to a close.

Meanwhile, US stock futures slightly higher on Wednesday night after the decision. More US economic data will be released on Thursday, including housing starts and jobless claims at 8:30 a.m. EST.

There’s more central bank activity on Thursday with the Bank of England set to make its latest monetary policy decision. UK inflation rose to a 10-year high in November, data showed on Wednesday and could affect whether the bank tightens monetary policy.

Also focusing on European markets is purchasing managers’ index (PMI) data from across the eurozone and the UK for December. The data will likely reflect the imposition of restrictions. of Covid and a partial lockdown in some countries, such as Germany and the Netherlands, respectively.

– CNBC’s Tanaya Macheel and Saheli Roy Choudhury contributed to this report.