European stocks rise ahead of Fed meeting

The DAX index in Germany was 0.2% higher, the CAC 40 in France jumped 0.2% and the FTSE 100 in the U.K. added 0.1%

European stock markets rose Wednesday, with the focus on the conclusion of the latest U.S. Federal Reserve policy-setting meeting.

At 08:30 GMT, the DAX index in Germany was 0.2% higher, the CAC 40 in France jumped 0.2% and the FTSE 100 in the U.K. added 0.1%.

Sentiment has been boosted in Europe by Tuesday’s news that eurozone inflation declined to its lowest level in more than two years in October.

Prices gained 2.9% YoY in October, the slowest pace since July 2021, from 4.3% a month earlier, as per Eurostat's flash estimate.

The data is likely to strengthen the market's view that the European Central Bank is done with hiking rates as part of its fight against high inflation. This follows the decision of ECB policymakers to halt the central bank’s longest streak of interest rate hikes in its 25-year history last week, leaving the main policy rate at 4%.

Nevertheless, it is the U.S. central bank that will attract the most attention Wednesday, with the Fed set to conclude its latest policy-setting meeting later in the session.

The Federal Reserve is widely anticipated to stand pat on rates, and comments from Chair Jerome Powell will again take the spotlight as investors parse every word to determine where interest rates are headed.

Data showing a resilient economy has markets considering the possibility of a 25 bps hike in December, and traders are looking to see if Powell attempts to keep another hike on the table.

Back in Europe, there is little on the European economic calendar Wednesday, although data from Nationwide showed that U.K. house prices increased 0.9% on the month in October, an annual decline of 3.3%, in a sign that this sector is attempting a recovery after a series of rate hikes by the BoE.