Caution ahead of tonight’s Federal Reserve policy update is set to diminish risk appetite in Europe, with the FTSE 100 index poised for a broadly flat start.
The US central bank’s comments will be scrutinised for guidance on whether Wall Street is right to bet on the first cut in US interest rates in June.
US markets found positive territory yesterday as the S&P 500 index rose 0.6% to a fresh record of 5178 and the Dow Jones Industrial Average lifted 0.8%.
The gains came despite speculation that the Federal Reserve’s dot plot projections might signal fewer than the three rate cuts seen in 2024.
The uncertainty has been fuelled by the recent rise in oil prices, although Brent Crude fell slightly today to stand at just above $87 a barrel.
In Asia, the Hang Seng index and Shanghai Composite both posted modest gains while Tokyo’s Nikkei 225 was closed for a public holiday.
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