European markets opened in negative territory Tuesday as central banks take center stage this week.
The pan-European Stoxx 600 index opened 0.4% lower with all sectors in negative territory, as well as all major European bourses.
A focal point for global markets this week is the U.S. Federal Reserve’s final two-day policy meeting of the year. The meeting kicks off Tuesday, with the central bank’s monetary policy decision due Dec. 18.
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.