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LONDON (Reuters) – Investors were generally cautious before the Federal Reserve meeting on Wednesday, boosting the yen, as the rally that pushed up shares after Chinese and U.S. economic data in the previous session slowed in early London trading.
Investors look at screens showing stock information at a brokerage house in Shanghai, China January 16, 2020. REUTERS/Aly Song/Files
Risk appetite was limited ahead of the U.S. Federal Reserve’s policy meeting, and its statement at 1800 GMT.
European shares were mixed at the opening, but then rose, with the Stoxx 600 up around 0.3%, pushed up by gains in retail stocks.
The MSCI world equity index, which tracks shares in 49 countries, was up 0.2% at 0724 GMT, while MSCI’s main European Index was up 0.3%.
The Fed is not expected to make changes to its monetary policy at the meeting, which will be its first since it announced that it would pursue average inflation targeting.
Although the economic projections are expected to be somewhat improved from the last round of forecasts in June, Fed Chair Jerome Powell is expected to stick to his message that the road to recovery will be long and uncertain.
“While acknowledging the more rapid improvement in the economic backdrop, we expect the message to remain one of caution,” wrote RBC Capital Markets analysts in a note to clients.
“There is no upside for the committee to be positive at this juncture.”
Investors will also be watching for U.S. retail sales data, due at 1230 GMT, which is expected to show a robust increase.
London’s FTSE 100 lagged other European indexes, down 0.4%, and the pound was down against the euro, weighed down by fears of a disorderly departure from the EU single market.
UK inflation dropped to its lowest rate in almost five years last month, led by a large reduction