European markets set to start the trading day higher as investors digest Fed decision

LONDON — European stocks are expected to open higher on Thursday as global markets react to the U.S. Federal Reserve’s announcement that it will start to taper its bond-buying program.

The U.K.’s FTSE index is seen opening 32 points higher at 7,271, Germany’s DAX 68 points higher at 16,025, France’s CAC 40 up 37 points at 6,987 and Italy’s FTSE MIB 108 points higher at 27,322, according to data from IG.

Global markets will likely spend Thursday digesting the latest move and comments from the U.S. Federal Reserve.

The central bank said Wednesday it will begin to curb the pace of its monthly bond-buying program “later this month.” The buying will slow by $15 billion per month, which means the quantitative easing should end by the middle of 2022, although the Fed reiterated flexibility, saying the amount could change if warranted.

The Federal Open Market Committee said the move came “in light of the substantial further progress the economy has made toward the Committee’s goals since last December.”

Read more: Fed to start tapering bond purchases later this month as it begins pulling back on pandemic aid

Shares in Asia-Pacific rose in Thursday trade following the Fed’s announcement while U.S. stock index futures were steady during early morning trading on Thursday after major U.S. averages closed at records on Wednesday.

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Investors in the U.K. will be looking ahead to the Bank of England‘s Monetary Policy Committee decision later on Thursday where the bank will decide whether to pull the trigger on interest rate hikes. Policymakers have intimated that a hike is imminent.

Read more: Bank of England could be about to hike rates in the face of surging inflation

It’s a busy day for earnings in Europe on Thursday, with key corporate reports Credit Suisse, BMW, Commerzbank, Deutsche Post,Tate & Lyle, BT, Monte dei Paschi di Siena, Enel and SocGen.

Data releases include the final purchasing manager’s index composite data for the euro zone in October and German industrial orders for September.

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— CNBC’s Jeff Cox and Pippa Stevens contributed to this market report.

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