- German unemployment falls unexpectedly
- Eurozone inflation drops
- Yellen confirmed as new Fed Chair
- Very strong demand for Irish bond sale
FTSE 100: 0.38%
CAC 40: 0.30%
FTSE MIB: 0.88%
IBEX 35: 1.65%
Stoxx 600: 0.43%
European stocks advanced after German unemployment fell more than expected in December for the first time in five months.
German unemployment declined by a seasonally-adjusted 15,000 last month, ahead of the consensus forecast for a drop of 2,000. It compares to November's 9,000 increase.
The jobless rate remained unchanged at 6.9%, as predicted by analysts.
In a less bright note for markets this morning, Eurozone consumer prices dipped to 0.8% in December from 0.9% in November, in line with forecasts.
Concerns over falling inflation prompted the European Central Bank (ECB) to cut interest rates to a record low of 0.25% late last year. The ECB is targeting inflation of close to but below 2%.
"If inflation keeps edging lower, the likelihood of another cut to the refi rate or even negative deposit rates seem to be more pronounced than before," said ETX Capital Market Strategist, Ishaq Siddiqi.
"The Fed may be bowing out of the stimulus game but the ECB's in for a tough grind to repair the euro zone and prevent an economic crisis from taking hold again."
The ECB will announce its latest interest rate decision on Thursday when economists expect it will keep policy on hold.
Yellen confirmed as Fed Chair
Janet Yellen last night won Senate confirmation with a 56-26 vote to become the 15th Chairman of the Federal Reserve.
Yellen will replace Ben Bernanke who will step down at the end of the month after the Fed's next policy meeting when it could announce a further reduction to monetary stimulus.
The central bank last month said it would begin scaling back its monthly bond purchases to $75bn from $85bn and would gradually introduce further cuts so long as the economy continues to show recovery.
Against this backdrop, Fed officials Eric Rosengren and John Williams will speak in the US later on.
Ireland's post bailout bond issue
Ireland has experienced strong demand for the country's first debt sale since exiting its bailout from the European Union and International Monetary Fund last month.
The nation had intended to cap the size of the deal at about €3.5bn but an overflowing order book of more than €13bn for its 10-year-bond sale has allowed bankers to tighten the pricing of the deal.
The news provided a boost to banks, which stormed to the top of Stoxx 600 index today. Lloyds Banking Group and Royal Bank of Scotland were among the big risers.
Vestas Wind, Hugo Boss
Among other equities, Vestas Wind Systems continued to rally after it upgraded its estimate for 2013 free cash flow.
Hugo Boss declined after Societe Generale downgraded the shares
to 'hold' from 'buy'
Swedish Match slumped after Citigroup advised investors to sell the shares.
The euro was up 0.10% to $1.3642.
Brent crude futures rose $0.531 to $107.300 per barrel, according to the ICE.