PARIS (Reuters) – The main European stock markets are up at the start of the session on Wednesday before the decisions of the Federal Reserve, whose investors hope for less restrictive signals on the future path of its monetary policy.

In Paris, the CAC 40 gained 0.55% to 7,423.71 points at 07:50 GMT. In London, the FTSE 100 also takes 0.55% and in Frankfurt, the Dax advances by 0.59%.

The EuroStoxx 50 index is up 0.66%, the FTSEurofirst 300 0.51% and the Stoxx 600 0.49%.

For the markets, it is now official that the Fed will announce a rate hike of a quarter of a point at 6:00 p.m. GMT. But what the central bank will decide next remains unclear. Many observers anticipate a pause in the rate hike cycle, or even a cut later in the year.

“We expect the Fed to hike rates by 25 basis points to a target range of 5.0-5.25% and signal a pause without fully committing to it,” writes Societe Generale in a rating.

“Reference to further tightening may be removed from the statement, but the Fed will remain data dependent… Inflation in non-housing services is not slowing as quickly as hoped, but the cumulative 500bp tightening means that the Fed can gauge how the decline in lending volumes and demand for credit – and the debt ceiling drama – is evolving.”

Biggest drop in the CAC 40, Stellantis lost 2.06% in Paris despite a 14% increase in net sales in the first quarter.

BNP Paribas is stable (+0.23%) after the publication of its results, marked by a net profit multiplied by more than two.

Elsewhere in Europe, the Italian bank UniCredit climbed 5.91% after raising its annual targets and the German company Lufthansa fell 3.74% after its results.

(Laetitia Volga, editing by Kate Entringer)

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