Europe open: Markets rise after Fed maintains rates; ECB eyed

European stocks were higher on Thursday morning after the US Federal Reserve delivered no surprises, while the European Central Bank's upcoming policy announcement was also in focus.

At 0905 GMT, the Stoxx 600 was 0.2% higher at 407.07, as Germany's Dax climbed by 0.2% to 13,168.56 and the French CAC 40 rose by 0.2% to 5,872.17. Meanwhile, London's FTSE 100 was up by 0.4% at 7,246.65.

The US Federal Reserve voted to leave rates unchanged on Wednesday evening, with chairman Jerome Powell giving no indication that further cuts could be on the horizon.

CMC Markets analyst Michael Hewson said: "As suspected last Friday’s bumper payrolls report appears to have reinforced US policymaker’s confidence in the labour market as well as the US economy. Rather perversely the changes in the statement actually caused the US dollar to fall, despite the prospect of no changes next year.

"What did change was that Fed officials nudged their inflation expectations downwards for next year, as well shifting downwards the rate dot path expectations for both 2020, 2021 and 2022, and it is this it would appear that prompted the US dollar to weaken, and bond yields to slip back."

Sino-US trade relations remained in play as Reuters reported that US President Donald Trump will meet with senior trade officials to discuss the $150bn worth of tariffs that Washington is scheduled to hit Chinese goods with from this weekend.

A source familiar with the plans was quoted as saying: "I’m expecting them to raise the tariffs on Sunday. The administration is preparing its talking points about how that’s the right thing to do. The message is that it will not be painful."

Meanwhile, the ECB and its new President Christine Lagarde will take centre stage on Thursday afternoon, with an announcement of the bank's latest monetary policy decision expected at 1245 GMT.

Rabobank analysts said: "In her first speech, Ms. Lagarde stated that the ECB’s strategic review would begin soon. The press conference today may reveal more information about this, and could come with a formal announcement.

"Among many other policy/mission tweaks, will it include a pledge to also do ‘whatever it takes’ to get to the eurozone to net-zero carbon emissions?"

Among individual stocks, travel group TUI rose a day after it announced a cut to its full-year dividend in order to invest in future growth opportunities.

Channel tunnel operator Getlink was in the red as it reported a 13% decline in the number of shuttle passengers in November, with the drop attributed to Brexit uncertainty.