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Positive data from Germany was overshadowed by fears the European Central Bank could take a hit on its Greek debt holdings, reports Reuters.
IMF managing director Christine Lagarde warned Greece's public sector creditors could need to lend a hand with the potential restructuring if those in the private sector are unable to make the country's debt sustainable.
Spanish and Italian bond debts continued to rise and European equities took on some losses before the Federal Bank announced a decision on interest rates.
"There seems to be a shared feeling among economists and market participants that the projections will reveal that Federal Open Market Committee members see the first rate hike well beyond mid-2013, probably mid-2014," said Alessandro Mercuri, a strategist at Lloyds.
Reuters noted yesterday that the pan-European FTSEurofirst 300 shed 0.7 per cent after Greek debt talks stumbled.
Posted by Greg Secker
