European stock markets rose ahead of the Federal Reserve’s decision. UK GDP was unchanged in April. From Investing.com

Investing.com – European stocks rose Wednesday as investors digested regional growth and inflation data ahead of the conclusion of the Federal Reserve’s latest policy meeting.

At 03:15 ET (07:15 GMT), German shares were up 0.4%, French shares were up 0.4% and UK shares were up 0.6%.

UK growth stalled in April

Harmonized for comparison with other European Union countries, German rose 2.8% in May, up from 2.4% in April.

“Inflation rates have risen slightly again, mainly due to the continued rise in service prices,” said Ruth Brand, head of the Office for National Statistics.

Service prices rose 3.9% in May compared to the same period last year, following a 3.4% increase in April.

Last week’s interest rate cut determined that inflation had retreated enough that monetary policy could be eased to boost the struggling economy.

Evidence of weaker growth in the wider region comes from the UK, where growth rose 0.4% month-on-month in March before stagnating in April.

The figures follow Tuesday’s labor market data showing declining employment and rising unemployment.

Focus on Fed Meeting

However, the main focus of the day will be the latest Fed conclusions later in the session, when the Fed is expected to keep interest rates on hold.

But Fed policymakers are likely to backtrack on their forecast for three rate cuts this year when they announce their rate decision, as inflation has appeared tight so far this year.

Futures are pricing in about 36 basis points of easing this year, with the odds of a September cut looking roughly 50:50.

A widely viewed U.S. release is also scheduled for a later date.

Crude oil prices rise on demand optimism

Crude oil prices rose on Wednesday, boosted by an optimistic outlook for global demand.

By 3:15 a.m. ET, futures (WTI) were up 0.7% at $78.46 a barrel, while the contract was up 0.5% at $82.34 a barrel.

Data released Tuesday showed U.S. crude oil inventories fell more than expected last week, raising hopes that U.S. fuel consumption is recovering as the busy summer season begins.

There was also optimism in the news that the U.S. Energy Information Administration had raised its forecast for global oil demand growth in 2024 from the previous estimate of 900,000 barrels per day to 1.1 million barrels per day.

The Organization of the Petroleum Exporting Countries (OPEC) maintained its 2024 outlook for relatively strong growth in global oil demand, citing expectations for travel and tourism in the second half of the year.

A monthly report will also be released later this week, and EIA will also release an official weekly US report.