European Shares Seen Opening Firm Ahead Of ECB Rate Decision

European stocks are likely to open higher on Thursday ahead of the ECB’s monetary policy decision later in the day.

No change in interest rates is expected but hawkish guidance regarding future actions and any signal that asset purchases will end “early” in light of record-high inflation could boost the euro.

Across the Atlantic, trading may be impacted by reaction to reports on initial jobless claims, retail sales, import and export prices and consumer sentiment.

Earnings news is also likely to attract attention, with financial giants Citigroup, Goldman Sachs and Wells Fargo among the companies due to report their quarterly results before the start of trading.

Cleveland Fed President Loretta Mester and Philadelphia Fed President Patrick Harker are due to speak as investors watch for clues on how the U.S. central bank would reduce its trillions of dollars in bond holdings.

Fed Gov. Christopher Waller’s comments Wednesday indicated that inflation could have peaked and might start to fall.

Asian markets were mostly higher after China’s cabinet said Beijing would use timely cuts in banks’ reserve requirement ratios (RRR) and other policy tools to counter the impact of Covid-19 and boost the recovery and growth of consumption.

The dollar edged down alongside the slowdown in U.S. Treasury yields, despite the Reserve Bank of New Zealand, the Bank of Canada and Bank of Korea all hiking interest rates.

Oil dipped after a two-day rally as traders weighed a larger-than-expected build in U.S. oil stocks against tightening global supply.

U.S. stocks rose overnight as Treasury yields pulled back across the curve and investors digested the latest earnings reports from the likes of JPMorgan Chase, Delta Air Lines and Bed, Bath & Beyond.

Investors shrugged off data showing that U.S. monthly producer prices increased by the most in more than 12 years in March.

The Dow climbed 1 percent, the S&P 500 added 1.1 percent to snap a three-day losing streak and the tech-heavy Nasdaq Composite jumped 2 percent.

European stocks ended mixed on Wednesday as investors weighed the risks associated with soaring inflation, the ongoing war in Ukraine and an extended Covid-19 lockdown since late March in Shanghai.

The pan European Stoxx 600 ended flat with a positive bias. The German DAX dropped 0.3 percent, while France’s CAC 40 index and the U.K.’s FTSE 100 both finished marginally higher.

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