European stocks close higher, with market eyes on Fed and ECB

European stock markets closed slightly higher on Wednesday (23) after, with investors waiting for the release of the minutes of the most recent monetary policy meetings of the European Central Bank (ECB) and the Federal Reserve (Fed).

Activity data on the continent also guided business in this session.

In London, the FTSE 100 rose 0.17%, to 7,465.24 points, while the CAC 40, in Paris, advanced 0.32%, to 6,679.09 points, and the FTSE MIB, in Milan, closed lower of 0.04%, to 24581.14 points.

In Madrid, the Ibex 35 index rose 0.11% to 8,334.00 points.

The DAX index, in Frankfurt, followed the movement and closed up 0.04%, at 14,427.59 points. Finally, on the Lisbon Stock Exchange, the PSI 20 increased by 0.41%, to 5,870.77 points. Quotes are preliminary.

While waiting for the release of the ECB minutes, investors were attentive to expectations with the Fed minutes, which come out this afternoon.

CMC Markets analyzes that the document could lead central banks to avoid an increase as aggressive as previously thought, benefiting risky assets.

The European PMIs released today, even though they revealed some positive numbers, did not rule out the prospect of a loss of economic momentum. According to Oxford Economics, data continues to show that the bloc has entered a recession.

The bloc’s economic contraction was also mentioned by ECB vice-president Luis de Guindos, who spoke to the Reuters that the euro zone economy should post negative growth rates in the fourth quarter.

For Capital Economics, headline inflation in the eurozone is likely to peak and will start to fall sharply in early 2023, “but the base rate will likely peak a little later and decline more slowly.”

In the UK, Chancellor Jeremy Hunt has championed the independence of the Bank of England and committed to a responsible fiscal stance. “We can’t spend what we don’t earn and we’re going to pay our debts.”

Among stocks, Credit Suisse closed down more than 5% after warning it expects to post its fifth straight quarterly loss.

Entertainment companies, such as Flutter Entertainment and Entain, recorded the second consecutive day of increases, of around 2%.

CMC Markets points out that investors in the sector were motivated by the World Cup and by “surprising results”, such as the match between Argentina and Saudi Arabia.