Markets in Europe are expected to open on a strong note on Wednesday tracking the bullish momentum in the Asian markets as well as the rally in Wall Street, a day earlier. Sentiment recovered considerably after U.S. Treasury Secretary Janet Yellen on Tuesday said the government could backstop more deposits if necessary to stop contagion. Anxiety ahead of the Fed’s review could however limit gains.
Wall Street had closed on a strong note on Tuesday as the announcement generated lot of relief. The Nasdaq Composite added 1.58 percent to close at 11,860.11 whereas the Dow Jones Industrial Average gained 0.98 percent to finish trading at 32,560.60.
Amidst the relief, markets in the region too had closed higher on Tuesday led by U.K.’s FTSE 100 that rallied 1.79 percent. Germany’s DAX bounced 1.75 percent whereas France’s CAC 40 and Switzerland’s SMI added around 1.40 percent. The pan-European Stoxx-600 gained 1.33 percent.
Current indications from the European stock futures imply a positive sentiment at play. The DAX Futures (Jun) is currently trading 0.35 percent higher. The FTSE 100 Futures (Jun) is currently trading 0.12 percent higher. The CAC 40 Futures (April) had closed 1.5 percent higher on Tuesday whereas the SMI Futures (Jun) had closed 0.53 percent higher. The pan-European Stoxx 50 Futures (Jun) had closed flat on Tuesday.
American stock futures are trading directionless. The US 30 (DJIA) is down 0.04 percent whereas the US500 (S&P 500) is 0.03 percent higher. The Fed is slated to review the target funds rate as well as release economic projections later in the day.
Asian stock markets are trading higher tracking positive sentiment in Wall Street and Europe on Tuesday. Japan’s Nikkei 225 has gained close to 2 percent followed by Hong Kong’s Hang Seng which has gained around 1.7 percent. South Korea’s KOSPI has rallied more than a percent. Australia’s S&P ASX 200 has added 0.9 percent. New Zealand’s NZX 50 has gained 0.34 percent. China’s Shanghai Composite edged up 0.11 percent. India’s Nifty 50 is also trading in the green zone.
The Dollar Index (DXY), a measure of the Dollar’s strength relative to six currencies, has decreased to 103.18, down 0.07 percent on an overnight basis. The EUR/USD pair has increased 0.05 percent to 1.0772 whereas the GBP/USD pair has gained 0.15 percent to trade at 1.2233.
Gold Futures for April settlement are trading almost flat at $1,941.95 per troy ounce. The previous close was at $1,941.10.
Expectations of a rise in crude oil inventories and anxiety ahead of the Fed’s decision dragged crude oil prices lower. Brent Crude Futures for May settlement has decreased 0.57 percent to $74.89 whereas WTI Crude Futures for May settlement has decreased 0.65 percent to $69.22.
Inflation readings from Germany are expected later in the day. Annual inflation is seen falling to 9.9 percent, from 10.1 percent earlier.
Major earnings updates due from the region on Wednesday include Santander Bank Polska, KGHM Polska Miedz, Olav Thon Elen, Terna, PGE, Jeronimo Martins and Tatneft.
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