European equities little changed
European equities were little changed on Thursday, before the European Central Bank gives its policy update. That’s something that traders have gotten used to.
Overnight implied volatility on the euro against the dollar jumped to a three-month high before the ECB’s policy decision and President Mario Draghi’s explanatory briefing. The dollar rose after Federal Reserve Bank of New York President William Dudley reiterated he sees an interest-rate hike this year. The Stoxx Europe 600 Index fell 0.1% amid mixed earnings. Oil slid back to $51 a barrel.
The ECB will announce its policy decision at 1.45pm Frankfurt time, and Draghi will speak to reporters 45 minutes later. The central bank is seen leaving policy unchanged, but investors will be looking for any hints of changes to its €1.7 trillion bondbuying programme, particularly the rules governing what debt can be bought. While the stimulus is scheduled to end in March, economists forecast it will be extended in December amid weak growth and an inflation level still closer to zero than the ECB’s goal.
The Stoxx 600 slipped less than 0.1% after rising for two straight days, as investors awaited the ECB and weighed mixed earnings reports.
The MSCI Asia Pacific Index gained 0.3%, with a gauge of energy shares surging 0.9%. Japan’s Topix index rose 1% to record its best close since May.
Oil fell after closing at the highest level in 15 months on government data that showed US crude stockpiles unexpectedly declined last week, trimming an overhang of inventories. West Texas Intermediate dropped 1% to $51.09 a barrel and Brent lost 0.9% to $52.21. Gold was little changed at $1,269.59, holding near the highest level in two weeks. Industrial metals fell, led by a 0.6% decline in nickel.