Fed’s latest rate decision ahead

Eurozone inflation eases for third month in a row as energy prices continue to fall

Inflation in the euro area came in at 8.5% in January, according to preliminary data released on Wednesday.

The 20-member region has passed substantial price increases in 2022, after Russia’s invasion of Ukraine raised energy and food costs across the bloc. However, inflation started to ease towards the end of 2022, showing two consecutive months of declines in headline levels. In December, the rate was recorded at 9.2%.

— Silvia Amaro

The main central banks will indicate the glide path of the interest rate

The Federal Reserve building is seen before the Federal Reserve board is expected to signal plans to raise interest rates in March as it focuses on fighting inflation in Washington, January 26 2022.

Joshua Roberts Reuters

The US Federal Reserve, the European Central Bank and the Bank of England are all expected to raise interest rates again this week, as they make their first policy announcements their 2023.

Economists will be closely watching policymakers’ rhetoric for clues about the path of future rate hikes this year, as the three major central banks try to plot a landing soft for their respective economies without allowing inflation to regain momentum.

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The market is pricing in a 25 basis point hike from the Fed on Wednesday, but the main question is what the Federal Open Market Committee will signal about further rate hikes in 2023.

Meanwhile, increases of 50 basis points are expected from the ECB and the BOE on Thursday.

Read the full story here.

— Elliott Smith

Stocks moving: Husqvarna up 6.2%, QinetiQ down 4.2%

Swedish outdoor machinery dealer Husqvarna was the highest rate after the opening, at 6.2%, despite reporting a higher operating loss for the fourth quarter. Adjusted for items including restructuring the loss narrowed, however.

At the bottom of the Stoxx 600 index, a UK defense firm QinetiQ shed 4.2%.

Reinsurer of Germany Hanover Rueck fell a similar amount after reporting higher full-year results that were in line with its previous forecast.

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— Jenni Reid

European markets open higher as investors prepare for the Fed’s next hike

Europe’s Stoxx 600 rose 0.3% in early trade, with travel stocks up 0.9% and financial services up 0.8%.

The UK’s FTSE 100 rose 0.25%, France’s CAC 40 rose 0.17% and Germany’s DAX rose 0.1%.

The rally at the beginning of the year stopped, but the European markets still managed to climb 6.72% until January.

Wednesday will be dominated by the announcement of the Federal Reserve’s monetary policy, where an increase of 25 basis points is expected, as well as hints on its future path and the assessment of the US economy.

— Jenni Reid

CNBC Pro: What Wall Street is expecting from the earnings of Shell, TotalEnergies and BP

European markets: Here are the opening calls

European markets are headed for a higher open on Wednesday as investors focus on the US Federal Reserve’s latest monetary policy announcement today.

The United Kingdom FTSE 100 index is expected to open 10 points higher at 7,781, of Germany DAX 30 points higher with 15,154, of France CAC up 10 points with 7,096 and of Italy FTSE MIB up 75 points at 26,721, according to data from IG.

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The earnings come from Vodafone, GSK and Novartis. The main data release in Europe on Wednesday is the flash inflation figures from the euro area for January.

— Holly Elliott

China’s factory activity contracts again

China’s factory activity in January signaled a further contraction from the previous reading, albeit at a slower pace, marking the sixth consecutive monthly contraction.

The Caixin Manufacturing Purchasing Managers’ Index for January came in at 49.2 on Wednesday, a slightly higher reading than December’s 49.0 but still missing Reuters expectations of 49.5

“Both manufacturing supply and demand continued to shrink last month. The damage from the pandemic was a drag on production and sales,” Caixin reported in the press release.

—Lee Ying Shan

CNBC Pro: This electric vehicle ETF is up 20% in January


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