LONDON — European stocks opened higher on Wednesday, rebounding as investors await comment from the U.S. Federal Reserve on its inflation and interest rate outlook.
The region's Stoxx 600 index closed lower on Tuesday, halting a strong rally that had been underway since the global selling pressure of Aug. 1-5.
France's CAC 40 was last up seven points to 7,490, Britain's FTSE 100 was up four points and Germany's DAX was up 10 points, according to IG Data.
It's been a quiet week on the European data front, apart from the release of flash euro zone purchasing managers' index figures on Thursday.
Attention is now shifting to the United States, where Federal Reserve meeting minutes will be released on Wednesday ahead of a speech by Federal Reserve Chairman Jerome Powell at a highly-anticipated central banking symposium in Jackson Hole on Friday.
The market has long been pricing in a Fed rate cut in September, but sentiment is shaky on whether the cut will be by 25 or 50 basis points, with the former having a 67.5% chance and the latter a 32.5% chance, according to CME's FedWatch tool.
Powell is not expected to offer clear guidance on the way forward, but his comments are likely to be interpreted as leaning more hawkish or more dovish.
His comments come amid ongoing debate over the health of the US economy following better-than-expected US retail sales and weekly jobless claims in July.
“If you think about it, inflation continues to fall, economic growth is still decent and holding up despite some signs of weakness, earnings season is looking pretty strong and the Fed is about to start cutting rates. So when you think about that, we're not that far from Goldilocks,” Bankis Chief Investment Officer Charles Henry Monchaux said Wednesday on CNBC's “Squawk Box Europe.”
“Taking all this together, the stock market situation is still pretty good. There are a lot of risks, but the headlines are still good,” Monchaux said.
Asia-Pacific markets were broadly lower in Wednesday trading, following losses on Wall Street.
