Peter Nurse 

Investing.com – European stock markets are expected to open cautiously Wednesday ahead of the Federal Reserve’s latest monetary policy decision, with U.K. markets seen underperforming amid political turmoil. 

The contract in Germany was 0.2% less at 2:05 AM ET (705 GMT), while the French contract dropped 0.1%, and in the U.K. the contract fell 1.2%.

Central banks are front and center in terms of investors’ focus this week, with the , the , the and the all holding gatherings to discuss future policy decisions.

At 2PM ET (1900 GMT), the Fed will announce its decision, with Chairman Jerome Powell starting his press conference half an hour later. Powell is expected to announce an expedited end of the Fed’s bond buying program and take a step towards interest rate increases in order to reduce consumer prices which have been rising at the highest pace in nearly 40 years. 

After Prime Minister Boris Johnson’s severe blow to authority, the U.K. equity market is expected to perform poorly. This raises more questions about Johnson’s leadership.  In a late-night vote on Tuesday, nearly 100 lawmakers from his party voted in favor of new coronavirus regulations.

Additionally, U.K. soared 5.1% on the year in November, a new 10-year high and more than double the Bank of England’s target, according to data released Wednesday.

On Thursday, the U.K. central banking will keep rates at the same level as inflation. This is because it has been reacting to Omicron Variant Covid-19 spreading in the country.

China’s November growth rate was higher than predicted, however it slowed down due to new Covid-19 infections. Data from Wednesday morning showed this.

Generali (MIA:) will feature in corporate news after it announced its plans to pay shareholders dividends of up to 6.1 million euros ($7.4 billion).

Fashion giants earn huge amounts Inditex (MC:) and H & M Hennes & Mauritz Wednesday will be a day of study for the (ST:). Zara’s profit margins more than tripled during the same period that Zara stores were reopened around the globe.

On Wednesday, oil prices dropped for the third consecutive day due to concerns that the Omicron-driven increase in coronavirus case will lead to a fall in demand and a decrease in supply. 

According to the International Energy Agency, Tuesday’s surge in Covid-19 case numbers will reduce global oil demand while crude production is expected to rise in particular the United States.

Data from industry group, indicated that inventories dropped by 815,000 barrels last Wednesday, which is a lower decline than anticipated, according to U.S. data later Wednesday.

U.S. crude oil futures were 1.5% less at $69.64 per barrel by 2AM ET. The contract was 1.3% lower at $72.77. Each contract has fallen by more than 3 percent this week.

Also, the price of gold fell 0.3% at $1,767.60/oz while it traded 0.1% higher to 1.1273.