Europe open: Markets mixed ahead of Fed meeting, oil drops
European stocks were mixed on Wednesday morning as markets remained subdued ahead of the US Federal Reserve meeting, while oil prices continued to retreat from Monday's highs.
At 0831 BST, the Stoxx 600 was flat at 389.17 as Germany's Dax fell by 0.1% to 12,366.42 and France's CAC 40 edged 0.1% lower to 5,611.32. Meanwhile, London's FTSE 100 was up 0.2% at 7,331.11.
The US central bank is widely expected to lower interest rates for the second time in less than two months, with a 0.25% rate cut seen as the most likely outcome, though many investors remained cautious.
Connor Campbell, market analyst at Spreadex, said: "At the start of the month, the chance of a rate cut – according to the CME Group’s FedWatch tool – was as close to certain as you could get. Now it sits at 56.5%, itself a sharp decline from the 63.5% likelihood seen just yesterday."
"Improving relations between the US and China, a one-year high core inflation reading and surging oil prices have all helped cast doubt on the Fed’s next move, making trading the meeting far trickier than, say, its July’s counterpart."
Oil prices continued to fall after Monday's excitement, with Brent Crude 0.12% lower at $64.63 and West Texas Intermediate down 0.17% at $59.24 after Saudi Arabia's oil minister said production lost as a result of weekend attacks on its facilities would be restored by the end of the month.
AxiTrader analyst Stephen Innes said markets would be looking at how Saudi Arabia retaliates for the attack.
"Keeping in mind their position as the de-facto leaders of OPEC, frankly, I don't think they want to stir up a middle east hornet's nest suggesting a more measured response which would not necessarily add to an already heightened level of supply risk premium."
Among individual stocks, Moncler led the Stoxx 600's fallers after Reuters quoted the Italian jacket maker's chief executive as warning this year's trading could be impacted by ongoing unrest in Hong Kong, which accounts for 6-7% of the company's overall revenues.
Electricite de France topped the risers as it reported that welding problems on steam generators at six of its nuclear reactors were not serious enough to require immediate attention.
(Editing by Frank Prenesti)