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European markets head for cautious open ahead of Fed decision

Soegeefx AppsEU MarketEuropean markets head for cautious open ahead of Fed decision

Key Points

  • Global investors are focused today on the Fed’s forthcoming monetary policy decision, due to be announced Wednesday following a two-day meeting.
  • Markets are widely anticipating a second consecutive 75 basis point hike to interest rates.
  • Credit Suisse announced that CEO Thomas Gottstein would step down as the bank reported a massive second-quarter loss.

LONDON — European markets are set for a cautiously positive start on Wednesday as investors look ahead to the latest monetary policy decision from the U.S. Federal Reserve.

Britain’s FTSE is expected to open around 27 points higher at 7,333, the German DAX is seen 66 points higher at 13,163, and France’s CAC is expected to gain a single point to 6,212.

Global investors are focused today on the Fed’s forthcoming monetary policy decision, due to be announced Wednesday following a two-day meeting. Markets are widely anticipating a second consecutive 75 basis point hike to interest rates.

Like many central banks around the world, the Fed is acting aggressively to rein in inflation against a backdrop of slowing economic activity.

Concerns for the global economy deepened on Tuesday after the International Monetary Fund cut its global growth projections for 2022 and 2023, dubbing the world’s economic outlook “gloomy and more uncertain.”

The IMF now expects the global economy to grow 3.2% this year, before slowing further to a 2.9% GDP rate in 2023. The revisions mark a downgrade of 0.4 and 0.7 percentage points, respectively, from its April projections.

It’s a busy day for earnings in Europe with and reporting as well as Daimler, Danone, carrefour and Airbus.

Credit Suisse announced that CEO Thomas Gottstein would step down as the bank reported a massive second-quarter loss, as poor investment bank performance and mounting litigation provisions hammered earnings.

The embattled Swiss bank posted a net loss of 1.593 billion Swiss francs ($1.66 billion), far below consensus expectations among analysts for a 398.16 million Swiss franc loss.

Gottstein, who took the reins in early 2020 following the resignation of predecessor Tidjane Thiam after a spying scandal, will be replaced by Ulrich Koerner, previously CEO of the bank’s asset management division.

 beat market expectations to post an eighth straight quarter of profit on Wednesday, recording a second-quarter net income of 1.046 billion euros ($1.06 billion).

The German lender exceeded consensus expectations among analysts aggregated by Refinitiv of a 960.2 million euro profit, and vastly improved on the 692 million euro profit for the same period last year.

On the data front, German consumer sentiment is projected to slide to a record low in August as fears about diminishing gas supplies compound pressures from supply chain issues and the war in Ukraine.

The GFK institute’s consumer sentiment index dropped to -30.6 points heading into August, below the previous record low of -27.7 at the start of July.

Source : CNBC

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