European stocks look set to open a tad higher on Wednesday as the U.S. mid-term election results offered no major surprise.
Democrats took control of the House of Representatives in the midterm elections, dealing a serious blow to President Donald Trump’s agenda to push for further tax cuts.
The victory will allow Democrats to block Trump’s pro-business agenda and launch a string of investigations into his administration.
However, Republicans have retained control of the Senate, empowering Trump to appoint more conservative federal judges and agency officials amid Special Counsel Robert Mueller’s investigation of Russian election-meddling in 2016 and possible obstruction of justice.
The dollar seesawed versus the euro and yen while the British pound held near a three-week high on hopes of a Brexit deal breakthrough after Brexit Secretary Dominic Raab gave a thumbs up to reporters on his way out of a cabinet meeting.
Asian stocks recovered from early losses to trade mostly higher while oil extended losses from the previous session.
Traders look ahead to the Federal Reserve’s monetary policy announcement due on Thursday, with many expecting the Fed to leave interest rates unchanged.
Traders will keep a close eye on the accompanying statement for clues about an expected rate hike in December.
It is a relatively busy day for economic releases in Europe, with reports on German factory production and Eurozone retail sales figures scheduled for release later in the session.
German industrial output is expected to fall 0.1 percent monthly in September after a 0.3 percent slump in August. On an annual basis, output is forecast to grow 0.2 percent following a 0.1 percent drop in the previous month.
Euro-area retail sales are expected to edge up 0.1 percent in September from the previous month, when they fell 0.2 percent. Compared to a year ago, retail sales are expected to grow 0.8 percent after a 1.8 percent gain in the previous month.
Overnight, U.S. stocks fluctuated before closing higher as investors awaited the outcome of midterm elections and looked ahead to the Federal Reserve’s monetary policy announcement.
The Dow row 0.7 percent, while the S&P 500 and the Nasdaq Composite index gained around 0.6 percent.
European markets ended Tuesday’s session lower. The pan-European Stoxx Europe 600 index eased 0.3 percent. The German DAX slipped 0.1 percent, France’s CAC 40 index dropped half a percent and the U.K.’s FTSE 100 declined 0.9 percent.