The European Market started the day with losses ahead of the Federal Reserve’s (Fed) meeting, which have been the main focus for investors as they await hints on the future of the central bank’s asset-purchasing program.
European Market
The European Euro Stoxx 50 lost 1.07% to 2,793.01 at the time of writing, while the German DAX fell 1.19% lower to 8,266.56. The French CAC 40 edged 0.97% lower at 4,044.26, while the British FTSE 100 declined 0.82% to 6,412.54.
The markets have been reacting towards the Fed doubts and speculations over whether the US central bank would decide whether to scale back on its monthly asset-purchasing program as early as September.
Investors are expecting the minutes from the Central Bank’s latest policy meeting to be released on Wednesday for further clues on the future of the asset-purchasing program.
The most recent economic data showed the US economy is picking up and improving, urging speculation that the Federal Reserve (Fed) may start reducing the asset-purchasing program next month.
According the latest economic data the world’s largest economy grew by 1.7% in the second quarter, as well as a boost in the job market as the jobless rate went down by 7.4% in July, the lowest since December 2008.
The Labour market is yet to show an improvement as prices have been falling below the central bank’s 2% target.
In Germany, producer prices dropped 0.1% month-on-month in July, while 0.5% annually, the Federal Statistical Office reported.
While in Spain, the government will auction treasury bills maturing in 6 and 12 months, with a target of €4 billion.
In Australia, minutes from the Reserve Bank of Australia (RBA) revealed the reason the bank decided to reduce its key rate to 2.5%.
“On balance, with growth expected to remain below trend for longer and inflation to remain within the target even with the effects of a lower exchange rate, members concluded that a lower level of the cash rate would better contribute to achieving sustainable growth in demand consistent with the inflation target,” the minutes stated .
The Reserve Bank of Australia (RBA) has been regularly cutting its interest rate over the past 20 months to support and boost the economy. RBA recently reduced its forecast to 2.25% from 2.5%, for the economy growth this year.
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