Europe midday: Markets muted after Fed holds firm; ECB eyed
European stocks were subdued at noon on Thursday after the US Federal Reserve delivered no surprises, while the European Central Bank's upcoming policy announcement was also in focus.
At 1200 GMT, the Stoxx 600 was flat at 406.40, as Germany's Dax edged 0.1% higher to 13,158.12 and the French CAC 40 rose by 0.1% to 5,865.23. Meanwhile, London's FTSE 100 was up by 0.5% at 7,255.12 as investors awaited the outcome of the general election.
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.
London Capital Group analyst Jasper Lawler said: "What in effect Jerome Powell told investors is you can have your cake and eat it. You’ll have the economic growth and we’ll keep interest rates low too. With the benefit of hindsight, this is what we’ve had for an entire decade and goes a long way to explain the ongoing stock market records in the US.
"As we enter a new decade, we know these conditions aren’t sustainable but still the era of interest rates at rock bottom and a slow growth recovery keeps going."
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.
Olivier Konzeoue, FX Sales Trader at Saxo Markets, said: "ECB President Lagarde is widely expected to keep current accommodative conditions in place hence not much is expected in terms of direction short term for markets but her comment on the impact of negative rates, implying inflated asset prices or maintaining zombie activities afloat, will draw attention."
Among individual stocks, 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.