By The Associated Press
LONDON (AP) -- Stock markets in Europe and Wall Street futures eked out modest gains Wednesday ahead of an expected interest rate increase by the U.S. Federal Reserve.
KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 7,373 while Germany's DAX was flat at 11,987. The CAC 40 in France was 0.1 percent higher at 4,978. Wall Street was poised for some gains at the open, too, with Dow futures and the broader S&P 500 futures up 0.2 percent.
FED IN FOCUS: The U.S. central bank looks set to raise interest rates by a quarter of a percentage point when policymakers wrap up their two-day meeting on Wednesday. Analysts said a rate hike, which would be its third in the current cycle, is already widely expected in financial markets. Investors will be more interested to see what Fed chief Janet Yellen says about the pace of future increases.
MARKET INSIGHT: "It's quite clear that investors have been gearing up to today's decision from the Fed ever since the blackout period began a little over a week ago," said Craig Erlam, senior market analyst at OANDA. "Market expectations have been raised dramatically ahead of the meeting by a coordinated onslaught of hawkish commentary from policy makers, to the point that a rate hike is now around 94 percent priced in."
DOLLAR AT FRONTLINE: Should the Fed sound more aggressive about rate increases than the markets are anticipating, the dollar could be a big gainer as traders price in the likelihood of more interest rate hikes in coming months. Ahead of the meeting, it was relatively steady, with the euro up 0.2 percent at $1.0628 and the dollar 0.1 percent lower at 114.70 yen.
ENERGY: How the dollar performs will have a bearing on commodity prices too, which are priced in dollars. On Wednesday, oil prices bounced after a slump in U.S. trading fueled by oversupply concerns. Benchmark U.S. crude rose $1.02 to $48.74 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, which is used to price international oils, added 87 cents to $51.79 per barrel in London.
TRADE: China's top economic official sought to defuse tensions with the U.S. over trade in a news conference as the country's annual legislative session ended. Premier Li Keqiang vowed to keep the yuan's exchange rate stable, saying there's no plan to devalue it to boost exports and said his government has no desire for a trade war. U.S. President Donald Trump has repeatedly promised to declare that Beijing improperly manipulates its exchange rate, a move that could lead to trade sanctions.
ASIA'S DAY: Japan's benchmark Nikkei 225 stock index lost 0.2 percent to close at 19,577.38 and South Korea's Kospi dipped less than 0.1 percent to 2,133.00. The Hang Seng in Hong Kong edged 0.2 percent lower to 23,792.85 but the Shanghai Composite Index recouped early losses to rise 0.1 percent to 3,241.76. Australia's S&P/ASX 200 added 0.3 percent to 5,774.00.