- ECB cuts rates
- BoE keep policy unchanged
- German factory orders rise
- US adds fewer jobs than forecast

FTSE 100: 0.06%
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CAC 40: 1.65%
FTSE MIB: 2.82%
IBEX 35: 1.97%
Stoxx 600: 1.14%

European stocks bounced higher on Thursday after the Eurozone's central bank announced a surprise cut to all its main rates to address price instability and a weak recovery.

The European Central Bank decided to cut its main refinancing rate by 10 basis points to 0.05% and the deposit facility by another 10 basis points taking it to -0.20%. Analysts had expected no change to policy.

The central bank also agreed to start buying non-financial assets through an asset-backed security (ABS) programme.

At a press conference following the announcement, Draghi said the package will be launched in October 2014 with the aim of improving lenders' balance sheets, thus encouraging them to provide credit. To take note of, he said the decision was not unanimous and followed an assessment of a recent batch of disappointing data.
Draghi also said full-on quantitative easing was discussed at the meeting with some having weighed in for and against the proposal.

Joshua Mahony, analyst at Alpari UK, said: "The introduction of ABS provides yet another indication that the ECB is moving towards quantitative easing and the clear willingness of certain members within the governing council to push for such a measure means the expansion of the ECB balance sheet could just be beginning."

The euro tumbled 1.57% to $1.2943 following the ECB's decision.
The Bank of England also announced its latest policy move, opting to keep interest rates at 0.5% and asset purchases at £375bn.

Meanwhile, Ukrainian President Petro Poroshenko said he is ready to declare a ceasefire if talks with pro-Russian rebels are successful on Friday.

German, US data

German factory orders rose 4.9% year-on-year in July, following a 2% fall a month earlier. Analysts had predicted a 1.1% rise.

A separate German report revealed a further contraction in construction activity.

The purchasing managers' index for construction fell to 47.7 in August from 48.2.

In the US, jobless claims rose 4,000 in the week to 30 August to reach 302,000, more or less in line with the 300,000 forecast.

The US private sector added 204,000 payrolls in August, down from 218,000 the month before and below expectations for a 220,000 increase. This meant that hiring in the private sector grew at its slowest pace in five months.

The ADP jobs report comes ahead of tomorrow's official monthly non-farm payrolls report and unemployment rate estimate from the Labor Department.

BP slides on US court ruling

BP's shares plunged after a US judge found the oil giant acted with gross negligence in the 2010 Gulf of Mexico oil spill.

Standard Life surged after saying that it has agreed to sell its Canadian operations for C$4bn (£2.2bn) to Manulife Financial and would return £1.75bn of this to shareholders.

German builder Bilfinger declined as its 2014 earnings projections beat analysts' estimates.

Brent crude futures fell 0.71% to $102.04 per barrel, according to the ICE.

RD

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