European markets head for higher open after Fed rates reassurance

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  • European stocks are expected to open higher Thursday as markets around the world react to the Federal Reserve's latest outlook on the U.S. economy.
  • London's FTSE is seen opening 25 points higher at 6,791, Germany's DAX up 102 points at 14,701, France's CAC 40 up 25 points at 6,084 and Italy's FTSE MIB up 148 points at 24,164, according to IG.

LONDON — European stocks are expected to open higher Thursday as markets around the world react to the Federal Reserve's latest outlook on the U.S. economy.

London's FTSE is seen opening 25 points higher at 6,791, Germany's DAX up 102 points at 14,701, France's CAC 40 up 25 points at 6,084, and Italy's FTSE MIB up 148 points at 24,164, according to IG.

European markets look set to rally on positive global sentiment following comments from the Fed, which concluded a two-day meeting Wednesday. U.S. stock futures rose in the overnight session Wednesday evening, after the Federal Reserve said that it does not currently expect to hike interest rates through 2023.

Fed Chair Jerome Powell reiterated that the central bank wants to see inflation consistently above its 2% target, and material improvement in the U.S. labor market, before considering changes to rates or its monthly bond purchases.

The Fed also said it expects to see gross domestic product grow 6.5% in 2021, before cooling off in later years and inflation rise 2.2% this year, as measured by personal consumption expenditures.

In Europe, the Bank of England is meeting Thursday although no policy change is expected. Meanwhile, European markets will be awaiting the conclusion of the European Medicines Agency's (EMA) safety review into the coronavirus vaccine developed by AstraZeneca and the University of Oxford. Its safety committee is meeting Thursday.

The move came after a handful of countries suspended the use of the vaccine over blood clot concerns, despite the World Health Organization and the EMA saying there was so far no evidence of a link between the shot and a small number of reports on blood clots.

Earnings come from Generali, Hugo Boss, Rolls-Royce, WPP, Morrisons and John Lewis Partnership.

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