(MENAFN– ecpulse)
European stocks opened higher on Thursday as traders anticipated key policy decisions from the European Central Bank (ECB) and the Bank of England (BoE) later in the day.
Focus remains on the latest developments over Ukraine. UN Secretary Council and European leaders hold emergency talks in Brussels today, after attempts to foster a diplomatic meeting between Russia and Ukraine in Paris on Wednesday failed.
Meanwhile, Russia stands firm, but will come under heightened diplomatic pressure after it refused to recognize the interim government in Kiev that replaced President Viktor Yanukovych, who fled last month but is regarded by Russia as Ukraine`s rightful leader.
As of 03:50 a.m. ET, the Stoxx Europe 600 was up 0.49% at 338.73, helped by 0.99% gain in financials shares.
- London`s FTSE 100 rose 0.39% to 6,801.51
- Paris`s CAC 40 rose 0.67% to 4,420.72
- Frankfurt`s DAX 30 rose 0.38 to 9,578.28
While investors kept an eye on the crisis in Kiev, they also awaited the outcome of the ECB and the BoE monetary policy meeting later today. No change is expected but some analysts see chances of a rate cut this month.
ECB Policymakers remain under pressure to either cut interest rates again or use additional unconventional measures to fend off the threat of ultra-low inflation turning into something worse like deflation.
ECB President Mario Draghi put investors on notice last month for potential stimulus in March and repeated last week that the ECB remains alert.
Better-than-expected inflation data for February expectations leading up to this meeting are extremely mixed, yet with annual inflation just 0.8 percent, well below the ECB`s target of just below 2% percent, some economists expect additional interest rate cuts soon.
The BoE also takes central stage with the interest rate decision to be published later in the session.
Better than expected UK economic data helped to drive the pound higher against the U.S. dollar and euro and signaled a surprisingly rapid improvement in the UK economic growth.
A generally healthy economic outlook will give the Bank of England confidence to leave monetary policy unchanged on Thursday. Unlike the ECB, the BoE keeps their lips sealed until unemployment hits 7 percent threshold or inflation conditions deteriorate.
Governor Mark Carney said interest rates won’t need to rise immediately, even as the unemployment rate falls closer and closer to the bank’s 7% threshold, shifting focus to inflation falling for the first time in more than four years below the bank`s 2.0% target.
The consensus expects the BoE to keep rates at a record low of 0.5% and make no changes to its £375 billion asset-purchase program.
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