European stock markets traded with small gains Tuesday, with investors expecting a dovish leaning from the Federal Reserve at its latest policy-setting meeting, which starts later in the session.
At 03:05 ET (07:05 GMT), the DAX index in Germany traded 0.4% higher, the CAC 40 in France rose 0.5% and the FTSE 100 in the U.K. climbed 0.8%.
Fed starts its policy meeting The Federal Reserve starts its two-day meeting later in the session, and is widely expected to kick off an easing cycle at its conclusion on Wednesday, cutting rates for the first time in four years.
Some uncertainty exists over the size of the cut that the Fed will start with this week, and bets have been growing that the policymakers will agree to a cut of a hefty 50 basis points (bps) instead of the more traditional 25 bps to kickstart the economy.
Traders were seen pricing in a 68% chance for a 50 bps cut and a 32% chance for a 25 bps cut, CME Fedwatch showed.
Policymakers at the Bank of England and the Bank of Japan also meet on Thursday and Friday, respectively.
German ZEW survey, US retail sales in focus Ahead of the Fed, the German ZEW economic sentiment survey is expected to show a slight deterioration this month as conditions in the eurozone’s largest economy remained challenging.
U.S. retail sales are also forecast to have contracted month-on-month in August, but investors are likely to look past the numbers with an expected U.S. rate cut on the cards.
EssilorLuxottica extends Meta partnership In the corporate sector, EssilorLuxottica (EPA:ESLX) stock rose 0.5% after the eyewear giant said it had extended its partnership with Meta Platforms (NASDAQ:META) by entering into a new long-term agreement to continue the development of smart eyewear into the next decade.
EssilorLuxottica and Meta established their partnership in 2019, and have focused on two generations of Ray-Ban branded smart glasses since.
Kingfisher (LON:KGF) stock rose over 5% after the European home improvement retailer reported a flat first half profit reflecting weak demand for more discretionary ‘big-ticket’ purchases, but raised the bottom end of its profit outlook for the full year.
Crude gains ahead of expected Fed cut Crude prices pushed higher Tuesday on continued disruption to U.S. output in the wake of Hurricane Francine, ahead of the latest figures of the country’s crude stockpiles.
By 03:05 ET, the Brent contract gained 0.5% to $73.12 per barrel, while U.S. crude futures (WTI) traded 0.7% higher at $68.48 per barrel.
Both contracts settled higher on Monday in the aftermath of the latest hurricane to impact the Gulf of Mexico crude-producing region, and as traders awaited the start of an easing cycle by the U.S. Federal Reserve.
More than 12% of crude production and 16% of natural gas output in the U.S. Gulf of Mexico remained offline, according to the U.S. Bureau of Safety and Environmental Enforcement on Monday.
The American Petroleum Institute is set to reveal its weekly inventory data later in the session, ahead of the official figures on Wednesday, and traders are expecting another drop in U.S. crude stockpiles.
