European markets are heading for a negative open Tuesday as central banks take center stage this week.
The U.K.’s FTSE 100 index is expected to open 18 points lower at 8,240, Germany’s DAX down 22 points at 20,291, France’s CAC down 12 points at 7,342 and Italy’s FTSE MIB down 129 points at 34,618, according to data from IG.
The U.S. Federal Reserve’s final two-day policy meeting kicks off Tuesday, and the central bank’s monetary policy decision on Dec. 18 will be a focal point for global markets.
Traders are pricing in a 95% chance of a quarter-point cut Wednesday, according to CME Group’s Fed Watch tool. Investors will also be looking out for clues to future policy moves from Chair Jerome Powell’s press conference after the meeting.
The Bank of England then meets on Thursday, with markets so far pricing in only a slim chance of a final rate cut of the year.
In other news, Chancellor Olaf Scholz’s invitation lost a confidence vote in the German parliament on Monday, paving the way for a snap election on Feb. 23. Scholz had wanted to lose the vote in order for fresh elections to be triggered. The move came after the collapse of his coalition government last month.
Overnight, Asia-Pacific markets traded mixed Tuesday, while U.S. stock futures inched lower Monday evening.
Data releases in Europe Tuesday will include U.K. unemployment figures and Germany’s Ifo business climate and economic sentiment index. There are no major earnings releases.