General view of the Bank of England building in London.
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LONDON — European markets are set to open mixed on Thursday as investors process a raft of central bank action.
Germany’s DAX and France’s CAC 40 are seen opening slightly below the flatline, according to IG data, as the U.K.’s FTSE 100 nudges higher.
The Bank of England announces its latest monetary policy decision at midday London time. Market pricing slightly favors a 25 basis point interest rate cut from the U.K. central bank, kicking off its path of monetary easing. However, analysts say there is more uncertainty surrounding its decision than usual despite inflation holding at 2%, with some voting members still concerned about service sector inflation and wage growth.
The BOE’s meeting comes in the wake of the U.S. Federal Reserve’s, which ended in a widely expected hold on rates. At his press conference, Fed Chair Jerome Powell said a rate cut in September — which traders view as near-certain — was “on the table,” as long as inflation data continues to support one. Powell appeared to rule out that the cut would be as large as 50 basis points, however.
Investors are still processing Wednesday’s surprise move from the Bank of Japan, which raised its benchmark interest rate to around 0.25%, its highest level since 2008, and hinted at more tightening to come. The decision powered the yen to a four-and-a-half month high against the U.S. dollar, as Japanese stocks tumbled.
As central banks dominate the macro picture, earnings season continues in full force.
In U.S. trade on Wednesday, the tech-heavy Nasdaq Composite leapt 2.64% as Advanced Micro Devices posted a strong quarter, while Facebook owner Meta rallied in extended trading on stronger-than-expected results.
European technology stocks also saw big moves on Wednesday, posting strong gains in Europe as chip firm ASML jumped on a Reuters report suggesting it may be exempt from U.S.-led Chinese export restrictions.
Oil major Shell and British bank Barclays are among the firms reporting Thursday.