European stocks rose as bond yields cooled after the US slowed the pace of its planned sales of longer-term securities, while investors awaited the Federal Reserve’s interest rate decision later Wednesday. Orsted A/S slumped after a $4 billion writedown.
The Stoxx Europe 600 climbed 0.9% by 2:03 p.m. in London. Retailers led gains as Next Plc rallied after raising profit guidance. Orsted said it dropped the development of two US wind projects and recorded $4 billion in impairments as the crisis in the wind industry worsens.
The Fed is poised to hold interest rates steady at a 22-year high for a second meeting, while leaving open the possibility of another hike as soon as December with US economic growth staying resilient. Meanwhile, the US Treasury increased its planned sales of longer-term securities by slightly less than most major dealers expected, a move that signals officials may be concerned about the surge in yields over the past several months.
“We’re reaching the peak tightening level and the important question is going to be what they say about when rate cuts could come,” Jean Boivin, a former Bank of Canada official and the current head of the BlackRock Investment Institute said in an interview in London. “Central banks are struggling right now to figure out what a 5% 10-year yield means in terms of tightening financial conditions, and markets will wait to see how much it tempers their worries about inflation. That’s a big question that could lead to some market volatility.”
Source: Yahoo Finance
