Following Schnabel's remarks from the ECB and before the Fed, European stock markets are expected to balance on Wednesday. Thus, the Eurostoxx 50 opens at 3,475.18 points (-0.78%), the CAC 40 at 5,949.84 points (-1.20%), the DAX 40 at 13,304.39 points (-0.91%), the BEL 20 at 3,677.19 points (-0.95%), the IBEX 35 at 8,066.40 points (-1.43%), the DJIA at 30,364.83 points (-0.50%), the Nasdaq at 10,828.35 points (+0.18%), the S&P 500 at 3,735.48 points (-0.38%) and the Nikkei 225 at 26,380.51 points (-0.94%).

As for exchange rates, the change from the close in New York indicates that EUR/USD opens at 1.0429 (+0.11%), EUR/JPY at 140.85 (-0.20%), and USD/JPY at 135.07 (-0.30%).

Investors will monitor the final inflation figures for May on Wednesday, while the Bank of France raised its second-quarter growth forecast from 0.2% to 0.25% on Tuesday evening.

European equity indices are expected to change little at the opening on Wednesday, after Isabel Schnabel, a member of the Executive Board of the European Central Bank (ECB), said that the institution could very quickly set up a program to buy bonds from states on the periphery of the eurozone. However, any market progress should be limited to the approach of the Federal Reserve's (Fed) monetary policy decision. At 7:45, the CAC 40 futures contract lost 2.5 points, or 0.04%, according to data from the IG Markets broker. The DAX 40 contract gained 17.5 points, or 0.1%, and the FTSE 100 contract gained 1.5 points, or 0.02%.

In the United States, investors are preparing for the Fed's monetary policy announcements expected at 20:00. The statement from the American central bank will be followed by a press conference by its president, Jerome Powell, at 8:30pm. The hypothesis of a rate hike of 75 points on Wednesday continues to gain ground on the market. According to the FedWatch tool from the stock exchange operator CME, the probability of such a rise jumped from 35% on Monday to 99.7% on Wednesday morning. Until recently, Wall Street's central scenario was for interest rates to rise by 50 basis points on Wednesday, as after the May 5 meeting.

Against this background, Wall Street ended in a mixed order on Tuesday, remaining highly volatile following a new downturn that saw the S&P 500 index close in “bear market” territory for the first time since 2020 due to fears of inflation and rate hikes. The Dow Jones (DJIA) closed down 0.5% to 30,365.95 points. The expanded S&P 500 index fell 0.4% to 3,735.88 points. The Nasdaq Composite gained 0.2% to 10,828.35 points. Markets in Asia presented a mixed picture on Wednesday. While the Nikkei Index fell 1.1% in Tokyo late in the trading session, due to concerns about the Fed's decision, the Hong Kong Stock Exchange's Hang Seng Index and the Shanghai Composite gained 1.3% and 1.7% respectively.

The sell-off on US Treasury bonds slowed on Tuesday, but yields remain very high. The bond market adapted to the prospect of a more than 50 basis point increase in Fed policy rates on Wednesday, and 10-year bond yields increased half a percentage point between last Wednesday and Tuesday, which had not happened since 2008. The return on two-year debt increased even more sharply, causing the yield curve to flatten, which signals that investors are preparing for a recession.

In the eurozone, investors will react to Isabel Schnabel's remarks, as the 10-year Italian debt yield exceeds 4% for the first time since early 2014, according to Refinitiv data, compared with 3.33% before the ECB meeting last Thursday. If this trend continues, investors may be worried about a return to the debt crisis that shook the eurozone ten years ago. At the time, the widening of interest rate differentials between countries raised fears of an implosion of the monetary union.

The euro rose slightly against the dollar on Wednesday morning, after Isabel Schnabel's remarks and pending announcements from the Fed and a press conference by its president, Jerome Powell. JPMorgan maintains a bearish position on the euro.

Oil futures posted slight increases Wednesday morning. Fitch now expects Brent at $105 per barrel and US light sweet crude (WTI) at $100 per barrel, compared to $100 and $95 respectively previously, as the European embargo on Russian oil and the resulting reorientation of trade flows are likely to weigh on the oil industry in the short term. Around 7:30am, the August North Sea Brent contract earned 31 cents at $121.46 a barrel. The July contract for light sweet crude (WTI) listed on Nymex was worth 26 cents at $119.19 per barrel.