Fed Uncertainty Affects European Stock Markets!

Mixed Trend in European Stock Markets

European stock markets are experiencing noticeable fluctuations amid growing expectations that the Federal Reserve (Fed) may have completed its rate cuts for this year. The reactions following earnings reports from major U.S. tech companies are capturing investors' attention.

Market Uncertainties

As central banks around the world combat rising inflation, Eurozone investors are also focused on developments in the global markets. Fed Chairman Jerome Powell indicated after the monetary policy meeting in October that a rate cut in December is not guaranteed. Powell highlighted the high uncertainties in the markets, adopting a cautious stance.

Market Reactions and Interest Rates

Significant changes have been observed in the money markets following Powell's statements. The probability of a 25 basis points rate cut at the Fed's December meeting has decreased from 95% to 70%. This situation has led to declines in some indices in the European stock markets. For example, the Stoxx Europe 600 index is trading at 573.5 points after a decrease of 0.2%, while the FTSE 100 index has dropped 0.4%, reaching 9,723 points.

National Market Data

In Germany, the DAX 40 index is trading at 24,048 points after a 0.4% decline, while in France, the CAC 40 index is at 8,146 points, down 0.1%. On the other hand, in Italy, the FTSE MIB 30 index has gained 0.5%, reaching 43,436 points, while in Spain, the IBEX 35 index has increased by 0.3% to 16,085 points.

Impact of the ECB

Additionally, the European Central Bank's (ECB) monetary policy decisions continue to significantly impact market directions. The ECB decided to maintain the three main policy rates unchanged at its recent meeting in line with market expectations. ECB President Christine Lagarde announced that the downward risks to growth in the Eurozone economy have eased. Furthermore, in the UK, the housing price index showed a monthly increase of 0.3% in September, with an annual rise of 2.4%.