- US debt ceiling talks progress
- Yellen nominated Fed Chair
- Fed minutes show close call on policy
- BoE to announce interest rate decision
FTSE 100: 0.72%
CAC 40: 1.20%
FTSE MIB: 1.39%
IBEX 35: 1.36%
Stoxx 600: 0.96%
European stocks advanced after the US government made progress on debt ceiling talks and Janet Yellen was nominated as the new Federal Reserve Chair.
House Republican and Senate Democratic leaders are considering a short-term increase in the $16.7trn debt limit in order to stave off a possible default after October 17th when the Treasury starts to run out of cash to pay its bills, according to reports.
The government is in the second week of a shutdown after failing to agree on a budget bill by last Monday's deadline.
Lawmakers have continued to butt heads over the budget and raising the borrowing limit.
In other US news, President Barack Obama has officially nominated Federal Reserve Vice-Chair Yellen to be the next head of the central bank, taking over from Ben Bernanke next year.
Yellen, who has supported the Fed's stimulus programme, was a widely expected and favoured choice among investors.
The Fed last night released the minutes from last month's meeting which showed lawmakers decided to maintain its $85bn per month in bond purchases due to fears that the economy might falter.
The Fed came close to announcing a tapering of quantitative easing but concluded that there needs to be further signs of recovery in the US first.
The central bank's decision last month to keep its monetary policy unchanged shocked economists who expected a tapering of between $10bn to $15bn.
"The minutes from the contentious FOMC meeting last month reveal that despite the decision to delay the tapering of its asset purchases, which was described as a 'relatively close call', most Fed officials still expected to begin the tapering before year-end and to halt it completely by mid-2014," Capital Economics noted.
"Of course, that was before the current government shutdown began. There is now a risk that the Fed won't begin to slow its asset purchases until early next year."
Bank of England, ECB
The Bank of England (BoE) is expected to keep its monetary policy unchanged when it meets on Thursday.
The Bank's Monetary Policy Committee is likely to hold interest rates at 0.5%.
The central bank has vowed to maintain the rate at its record low until the unemployment rate falls from its current level of 7.7% to 7%.
During its meeting, the BoE is also expected to keep its asset purchase programme at £375bn.
The European Central Bank, on the other hand, is expected to unveil new liquidity measures at its next policy announcement, according to economists.
Almost three in four of economists predict President Mario Draghi will reveal new liquidity measures such as longer-term refinancing operations, surveys by Bloomberg showed.
The majority of forecasters also say interest rates will remain unchanged through the first half of 2015.
Tryg gains on third quarter results
Tryg rallied after the Nordic property and casualty insurer reported third-quarter pre-tax profit of 907m kroner, compared to the forecast for 885m kroner.
Hays rose after the UK recruitment agency posted a 2% rise in first-quarter net fees compared to last year on a comparable basis.
Givaudan declined after the fragrance maker reported third-quarter sales that missed estimates.