BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are set to open sharply lower on Thursday after the U.S. Federal Reserve painted a gloomy outlook of the U.S. economy, spurring demand for safe-haven assets.
After pledging to keep interest rates at current near-zero levels through 2022 and promising to maintain bond purchases at 'the current pace', the Fed projected that the U.S. economy will contract by 6.5 percent this year. Unemployment is expected to be at 9.3 percent by the end of 2020.
Asian markets drifted lower while the dollar rebounded amid U.S.-China tensions and fears of a hard Brexit.
Oil prices fell more than 3 percent on worries about slow demand growth after a leading expert said the United States may see 200,000 deaths because of the coronavirus at some point in September.
In economic releases, the U.K. house price indicator moved deeper into negative territory in May amid coronavirus pandemic, survey data from the Royal Institution of Chartered Surveyors showed.
The house price balance fell to -32 percent in May from -22 percent in April. This was the weakest monthly figure since 2010.
U.S. stocks ended mixed overnight after the Fed vowed to keep policy easy to support credit markets through the pandemic.
The Dow Jones Industrial Average lost 1 percent and the S&P 500 shed half a percent, while the tech-heavy Nasdaq Composite climbed 0.7 percent to a fresh record closing high.
European stocks declined on Wednesday as investors reacted to the OECD's gloomy outlook and waited for the outcome of the Fed meeting.
The pan European Stoxx 600 eased 0.4 percent. The German DAX dropped 0.7 percent and France's CAC 40 index gave up 0.8 percent while the U.K.'s FTSE 100 slipped 0.1 percent.
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