European stocks traded higher on Thursday ahead of a European Central Bank decision, as investors celebrated an easing in bond yields.
Up six of the last eight sessions, the Stoxx Europe 600
SXXP,
edged up 0.2%.
The yield on the U.S. 10-year Treasury
TMUBMUSD10Y,
fell below 1.5% for the first time in a week after U.S. core consumer prices saw a muted rise in February, taking air out of the fears of inflation that had recently worried traders. ECB President Christine Lagarde is to further explain the central bank’s worry that rising bond yields could interfere with monetary policy, at a news conference following the policy decision.
“While we do not expect the central bank to announce new measures, ECB President Christine Lagarde will strike a dovish tone, emphasizing the flexibility embedded in its pandemic QE [quantitative easing] program to front-load asset purchases as needed,” said economists at research service TS Lombard.
U.S. stock futures
ES00,
were stronger, particularly the technology-heavy Nasdaq-100
NQ00,
which closed lower on Wednesday.
In Europe, tech stocks including microchip equipment maker ASML
ASML,
technology investor Prosus
PRX,
and microchip maker Infineon Technologies
IFX,
advanced.
Banks including HSBC
HSBA,
and Barclays
BARC,
traded lower as yields fell.
Also read: Eurozone banks are showing life after 15 rough years. Will the ECB snuff out the rally?
Engine maker Rolls-Royce
RR,
rose 1%. The struggling company, which reported an underlying £4 billion loss in 2020, says it expects to be free cash flow positive in the second half of the year.