PARIS (Reuters) – The main European stock markets advance at the start of the session on Wednesday, the indices preparing for the meeting of the Federal Reserve (Fed) expected at 7:00 p.m. GMT.

In Paris, the CAC 40 rose 0.21% to 7,381.42 points around 08:03 GMT. The Dax in Frankfurt strengthened by 0.14%, while the FTSE in London gained 0.15%.

The pan-European FTSEurofirst 300 index advanced by 0.02%, the EuroStoxx 50 by 0.2% and the Stoxx 600 by 0.07%.

The Fed is expected to lower its rates by 25 basis points according to the money markets, but investors will be especially attentive to the economic projections and the comments that the central bank will make on this occasion.

Uncertainty remains high: in addition to the still unclear measures that Donald Trump will put in place, the American economy remains solid and inflation persists in certain parts of the economy, such as services.

“We believe that (Fed Chair Jerome) Powell will reiterate his recent comments that the data surprised to the upside, the labor market held up and that it will soon be appropriate for the Fed to slow the pace of reductions,” say Bank of America strategists.

“At the same time, we believe he will continue to talk about the support the Fed wants to provide to the labor market and to express confidence in the disinflation process,” the strategists add.

BofA therefore estimates that the Fed would pause its rate cuts in January, a scenario similar to that of money markets which are betting on a further cut in March only.

In terms of values, Renault jumped 7.2% after information according to which Honda and Nissan have opened negotiations to strengthen their ties. The French group is the main shareholder of Nissan.

(Written by Corentin Chappron, edited by Blandine Hénault)

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