European Shares Seen Up As Investors Await Fed Decision

(RTTNews) - European stocks may open higher on Wednesday, even as the upside may remain capped ahead of the Federal Reserve's rate decision later in the day.

The U.S. central bank is widely expected to leave interest rates unchanged, but traders will pay close attention to the accompanying statement for clues about the outlook for rates.

At the press conference following the rate decision, Chair Jerome Powell may reiterate that the Fed is 'proceeding carefully' and another rate hike is still an option based on incoming data.

U.S. reports on manufacturing activity, construction spending and job openings will also be in the spotlight as recession fears swirl.

Manufacturing Purchasing Managers' survey data and Nationwide house price figures from the U.K. are due later in the session headlining a light day for the European economic news.

A private survey showed earlier today that China's manufacturing PMI fell to 49.5 in October from 50.6 in September.

Asian markets were seeing broad-based gains, with Japan's Nikkei rallying more than 2 percent as the yen hovered near a one-year low in the wake of the Bank of Japan's decision to tweak its bond yield control policy again on Tuesday.

The dollar traded firm on safe-haven demand after Israeli airstrikes hit a densely populated refugee camp in the Gaza Strip on Tuesday, killing at least 50 Palestinians and a Hamas commander.

U.S. Secretary of State Antony Blinken will visit Israel today and make other stops in the region, State Department spokesperson Matthew Miller said.

Gold slipped ahead of the Fed decision while oil edged up slightly after plunging more than 5 percent in the first two days of the week on demand concerns.

Overnight, U.S. stocks ended higher but logged losses for a third straight month on concerns about interest rates and Middle East tensions.

In economic releases, employment costs unexpectedly accelerated in the third quarter, while consumer confidence declined for a third straight month in October, separate reports showed.

The Dow edged up 0.4 percent, the tech-heavy Nasdaq Composite added half a percent and the S&P 500 climbed 0.7 percent after the U.S. Treasury cut its estimate of how much the government would need to borrow in the fourth quarter.

Likewise, European stocks rose on Tuesday, but suffered their biggest monthly loss in about a year.

The pan European STOXX 600 advanced 0.6 percent. The German DAX rose 0.6 percent and France's CAC 40 jumped 0.9 percent while the U.K.'s FTSE 100 finished marginally lower.