- ECB and BoE announce policies
- German data released
- US jobless claims in focus later
FTSE 100: 0.20%
CAC 40: 0.30%
FTSE MIB: 0.48%
IBEX 35: 0.47%
Stoxx 600: 0.30%
Stocks in the euro-area rose on Thursday ahead of the European Central Bank's (ECB) latest policy announcement.
Although analysts broadly expect the ECB will keep its policy and interest rates unchanged after today's meeting, the monetary authority has come under mounting pressure to take greater measures to tackle deflationary risks.
ECB President Mario Draghi described December's weak 0.8% consumer price inflation reading as a "one-off" event but an unexpected further slide to 0.7% the next month prompted some experts to anticipate the central bank would make a move. The ECB is targeting inflation of close to but under 2%.
Credit Suisse said it sees the ECB taking the deposit rate marginally into negative territory and cutting its main policy rate in March or April. However, the broker said the possibility that it would bring forward the decision to today's policy meeting is a risk.
"We expect headline and core to hit a new low in March at 0.4% year-on-year. 2014 inflation is likely to be well below the ECB December staff projections, and prospects for the medium term have also weakened in our view," the broker said.
The Bank of England (BoE) is also expected to keep its interest rates unchanged at 0.5% and quantitative easing at £375bn at its meeting today as the UK recovery continues and inflation is in line with the central bank's 2% target.
The central bank has vowed to maintain its benchmark rate at the record low at least until unemployment falls to 7%.
However, the BoE's Governor Mark Carney may need to change his forward guidance as the jobless rate has fallen faster than expected to 7.1%.
"With the UK well on its way to recovery and the latest inflation readings falling perfectly in line with the central bank's target, the BoE is very unlikely to tinker with either tool this month, or at any meeting in the near future for that matter, unless of course something drastically changes," Craig Erlam, Market Analyst at Alpari, said.
Also on today's agenda is the release of German factory orders, retail and construction data. In the US will be initial jobless claims and Bloomberg's consumer confidence figures.
Daimler advanced after the luxury vehicle maker posted a 45% rise in quarterly profit.
Volvo gained after reporting fourth-quarter operating profit that beat projections and saying it will cut 4,400 jobs.
Credit Suisse Group dropped after posting fourth-quarter profit that fell short of analysts' estimates.
Alcatel-Lucent was higher as the French network-equipment vendor posted its first quarterly profit in two years. Fourth-quarter net income was €134m, compared with a €1.56bn loss a year earlier.
The euro fell 0.04% to $1.3527.
Brent crude futures rose $0.075 to $106.330 per barrel, according to data from the ICE.