Europe Economy

Europe Set to Follow Wall Street Higher Following Fed Move

Following another dramatic session on Wall Street which saw the Dow close 429 points higher after heavy buying in the last 90 minutes of trade, European stocks are expected to gain at the market open.

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The DAX is seen higher by 34 points, the FTSE100 is called higher by 46 points and the CAC 40 is expected higher by 10 points.

The buying followed news that theFederal Reserve has pledged to keep interest rates at zero for at least another two yearsand said it would consider other measures to help growth.

Three members of the Federal Open Market Committee (FOMC) voted against the move, an indication of just how long the central bank thinks it will take to get the market back to normal.

In the UK on Wednesday the governor of the Bank of England, Mervyn King, will present the bank's quarterly inflation report.

The market will be looking for any sign that the UK central bank is set to take further steps to support the central bank.

In the euro zone, Germany is reported to be pushing Italy and Spain to sell their gold reserves.

Spanish newspaper El Mundo reports that the Spanish finance minister says that such a move would have little impact on the national debt as the country’s reserves are worth only 11.3 billion euros.

Overnight we have had some positive data from China. Exports for July rose by a forecast-beating 20.4 percent whilst imports rose by 22.9 percent for the month.

Corporate earnings included Commerzbank whose profits were effectively cancelled out by taking 760 million euros ($1.07 billion) in impairments on Greek sovereign debt, Adecco beat a Reuters forecast poll and said net income was 141 million euros ($200.5m)and Nestle put in first half profits in line with expectations of 4.7 billion Swiss francs ($6.4 billion). Henkel is also due to report before the markets open.

Overnight we have had news that the CFO of Commerzbank, Eric Strutz will not renew his contract, a decision his boss, Martin Blessing said he regrets.

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