FX.co ★ European Shares Seen Mixed As Fed Sounds Less Hawkish Than Feared

European stocks are anticipated to display a mixed opening on Thursday as traders reconvene after the May Day holiday. However, anticipated losses may be minimal following the U.S. Federal Reserve's less aggressive stance than expected.

Fed Chair Jerome Powell indicated potential rate cuts but also cautioned about high inflation and an unclear future path. In Asia, after an initial slump, stocks regained some losses; Hong Kong's Hang Seng, notably, rallied over 2 percent in response to Beijing's latest efforts to bolster stocks.

The yen recorded a decrease against the dollar, reversing an earlier sudden increase, possibly due to Japanese authorities intervening. Gold saw a modest decrease and was trading just above $2,300 per ounce, while oil prices steadied after plummeting to a seven-week low on Wednesday. The decrease in oil prices was attributed to a surge in U.S. stockpiles and easing political tensions in the Middle East alongside ongoing truce discussions.

In economic announcements, PMI data from the euro area is expected to attract investor interest later in the day. Across the Atlantic, the reaction to reports on weekly jobless claims, trade balance, labor productivity, and costs might influence trading.

U.S. stocks were fluctuating before slightly closing higher overnight. The Fed opted to hold rates steady and cited the lack of inflation progress to lower interest rates from a two-decade high. The U.S. central bank also announced a slower pace in the reduction of its balance sheet, aiming to ease strains in the money markets.

In terms of data, private payrolls in April increased at a quicker than expected pace, while factory activity witnessed a reduction due to diminishing demand, as two separate reports revealed. While the Dow slightly increased by 0.2 percent, the tech-laden Nasdaq Composite and the S&P 500 both dipped by around 0.3 percent.

Most European markets remained closed on Wednesday for May Day, while the U.K.'s FTSE 100 saw a decrease of 0.3 percent.