Europe open: Shares edge lower ahead of Fed rate decision

(Sharecast News) - European shares edged lower at the open on Wednesday with attention focused on the outcome of the US Federal Reserve's two-day policy meeting where a cut in interest rates is widely expected.

The pan-regional Stoxx 600 index was flat at 577 points by 0822 GMT, with Germany's DAX and France's CAC 40 lower, while Britain's FTSE 100 gained 0.18%.

Traders are expecting the Fed to cut rates by 25 basis points, but eyes will be on any commentary about the future path of policy from Fed chair Jerome Powell amid a weakening jobs market and inflationary pressures from the government's global tariff war.

"While there is a 90% chance of a rate cut at this meeting, the outlook is less clear. In the lead up to this meeting, bond traders are scaling back their expectations for future rate cuts, with only two further reductions expected throughout 2026," said XTB research director Kathleen Brooks.

"This is an abrupt shift from a week ago when three rate cuts were expected, and it follows a hawkish shift in other regions, with rate cut expectations getting rapidly scaled back in Australia, New Zealand and Canada."

"The European Central Bank is also expected to have finished their rate cutting cycle. This leaves the Fed and the Bank of England as outliers and could impact the performance of the dollar and the pound in the coming months."

In equity news, shares in Delivery Hero surged after the German fast-food delivery giant late on Tuesday said it was evaluating its strategic options and focused on delivering "financial improvements".

Reporting by Frank Prenesti for Sharecast.com