European markets edged slightly lower Wednesday ahead of a much-anticipated U.S. Federal Reserve decision on interest rates.
The pan-European Stoxx 600 traded 0.1% down in early deals, with food and beverage stocks falling 0.7% while bank and auto stocks both jumped 0.5%.
President Donald Trump on Tuesday announced plans on Twitter for an “extended meeting” with Chinese President Xi Jinping at next week’s G-20 summit, sparking hopes of a resolution to the ongoing trade war between the two nations.
The G-20 summit is scheduled for June 28-29 in Osaka, Japan. Asian stocks surged Wednesday in reaction to the news, with major indexes in Hong Kong and mainland China climbing more than 2%.
The president also took aim at central bankers on Tuesday, lambasting European Central Bank (ECB) President Mario Draghi on Twitter for his proposal of more stimulus for the euro zone. Trump accused Draghi of currency manipulation after the euro fell sharply in reaction to his speech.
He then went on to leave open the possibility of demoting Federal Reserve Chairman Jerome Powell, ahead of Wednesday’s crucial monetary policy meeting. The Fed will make a decision on interest rates at 2.p.m. ET, with investors hopeful that Powell will signal a rate cut in the near future.
In the U.K., the number of Conservative party hopefuls to replace Prime Minister Theresa May was cut to five, after former Brexit Secretary Dominic Raab was eliminated in the second round of secret ballots.
Euroskeptic former Foreign Secretary Boris Johnson continued to surge ahead, with Conservative Members of Parliament (MPs) set to vote in their third leadership ballot Wednesday.
In terms of individual stocks, Danish hospital equipment maker Ambu topped the European blue chip index in early trade, rising 4.6% as investors looked to capitalize on Tuesday’s steep decline in its share price after the company cut its outlook for the year.
At the other end of the Stoxx 600, Belgian retailer Colruyt fell 7% following the company’s full-year results.
The U.K. will also release a raft of economic data Wednesday morning.