by Diana Mandia

PARIS (Reuters) – The main European stock markets are expected to rebound slightly at the opening on Wednesday after two sessions in a row of declines due to concerns over political turmoil in France, and as markets await the monetary policy decision of the US Federal Reserve (Fed) later today.

According to the first available indications, the Parisian CAC 40 could gain 0.45% at opening.

Index futures suggest an opening up 0.47% for the Dax in Frankfurt, 0.52% for the FTSE in London, 0.56% for the EuroStoxx 50 and 0.35% for the Stoxx 600.

European stock indices will try to recover on Wednesday after being shaken by political concerns in France with the calling of early legislative elections and the prospect of a possible government led by the far-right National Rally (RN).

These concerns have notably led to a decline in French banks and a rise in yields on France’s sovereign bonds, as well as warnings from financial rating agencies Moody’s and Fitch about the country’s credit rating and uncertainty regarding taxation and of reforms.

According to the governor of the Bank of France, François Villeroy de Galhau, France will have to quickly clarify its economic and budgetary strategy after the legislative elections while the uncertainty created by the vote has caused tensions on French sovereign debt.

The markets also remain cautious ahead of data on US inflation in May, expected at 12:30 GMT, and the announcement of monetary policy and the Fed’s outlook.

A status quo on borrowing costs is expected this Wednesday but the speech by Fed Chairman Jerome Powell will be closely followed to try to determine the short-term trajectory for interest rates.

A WALL STREET

The New York Stock Exchange ended in mixed order on Tuesday, with new closing records for the Nasdaq and the S&P 500.

The Dow Jones Index