European stocks edged higher on Thursday, as investors braced for a rate cut from the European Central Bank and awaited hints on policy moves next year as the euro zone economy struggles with slowing growth and heightened political risks.
The pan-European STOXX 600 index rose 0.1% by 0814 GMT, up for 10 of the past 11 sessions. Economically sensitive sectors such as oil & gas, auto and mining led morning gains.
The ECB is all but certain to cut rates again, with traders pricing in a 83% chance of a 25 bps reduction as euro zone inflation is nearly back at target and the economy is faltering.
European shares close up after US inflation data
Some analysts are also debating the possibility of a large 50 bps cut, with the odds of such a move at 16%. The ECB’s rate decision is due at 1315 GMT.
The Swiss National Bank (SNB) is expected to announce its rate decision at 0830 GMT, with recent market pricing pushing towards a larger 50 bps reduction, given weak Swiss inflation and the SNB’s aversion to a strengthening Swiss franc.
Among stocks, SThree Plc tumbled 35% after the British recruiter warned on the current financial year profit, citing tough hiring market conditions amid increased political and macro-economic uncertainty, particularly in Europe.
Swiss contract drugmaker Lonza rose 6.3% after it confirmed its full-year outlook.
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