Money Flow & EU Premarket: Improved Risk Appetite Following the Fed Meeting. European Markets Set for Positive Start

Market sentiment is mildly positive, with global stock markets posting moderate gains after encouraging corporate news from several major U.S. companies. Tesla, Meta, and IBM stocks rose in after-hours trading following their respective updates, while Microsoft lagged behind the trend. Reports that SoftBank is in talks to invest up to $25 billion in OpenAI also supported market sentiment. The technology sector is leading the gains in Nikkei 225, which is up by 0.3%. Nasdaq futures are outperforming S&P futures, rising by 0.5%, while Stoxx 50 adds 0.3%. And for another sign of improved market sentiment, Bitcoin is up ~1.5%, surpassing $105,000.

The Federal Reserve kept interest rates unchanged on Wednesday, as expected. The overall message did not bring significant changes to expectations for future rate decisions, although Chairman Powell clarified that the removal of the reference to inflation’s progress towards the target was not meant as a signal. The yield on U.S. two-year Treasury bonds remained nearly unchanged at 4.21%. The Bloomberg Dollar Index dropped by 0.1%, while the Japanese yen gained 0.4%, with no major reaction to comments from the Deputy Governor of the Bank of Japan, Hoshino.

The European Central Bank is expected to cut rates by 25 bps later today, but traders will have some economic data beforehand, including the first reading of GDP for Q4 in the eurozone. Risks appear balanced based on regional results – Spain exceeded expectations yesterday, while France reported slightly weaker results. Investors will also keep an eye on Spain’s CPI, which could offer the first hint of where inflation in the eurozone will position itself next week.