European stocks traded higher on Thursday, before the European Central Bank’s decision, with investors celebrating a reduction in bond yields.
Up to six of the last eight sessions, the Stoxx Europe 600 SXXP,
increased by 0.2%.
The yield of the 10-year US Treasury TMUBMUSD10Y,
fell below 1.5% for the first time in a week after US core consumer prices rose slightly in February, taking the wind out of inflation fears that recently worried traders. ECB President Christine Lagarde must explain in more detail the central bank’s concern that rising bond yields could interfere with monetary policy, at a news conference after the political decision.
“Although we do not expect the central bank to announce new measures, ECB President Christine Lagarde will adopt a dovish tone, emphasizing the flexibility built into her pandemic QE [quantitative easing] program to anticipate asset purchases as needed, ”said economists at TS Lombard research service.
US stock futures ES00,
were stronger, especially the high-tech Nasdaq-100 NQ00,
which closed down on Wednesday.
In Europe, technology stocks, including microchip equipment manufacturer ASML ASML,
Prosus PRX as a technology investor,
and microchip maker Infineon Technologies IFX,
advanced.
Banks, including HSBC HSBA,
and Barclays BARC,
traded lower as yields fell.
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Engine manufacturer Rolls-Royce RR,
rose 1%. The struggling company, which reported an underlying loss of £ 4 billion in 2020, says it expects to have positive free cash flow in the second half of the year.