European markets rally ahead of anticipated ECB rate cut

Holly Ellyatt@HollyEllyatt

LONDON — European stocks rallied Thursday as investors in the region await the latest monetary policy decision from the European Central Bank.

European markets

The pan-European Stoxx 600 was up 1.23% by 8:35 a.m. London time, with all sectors and major bourses trading in the green. Tech and mining stocks jumped 2.5% and 2.05%, respectively.

Shares of Swiss pharmaceuticals firm Roche fell 4.5% after it said Wednesday that positive results released in July from an early-stage trial of its experimental weight-loss pill were based on just six patients. Novo Nordisk shares were on course for their best day in a month, climbing 3.29%, on news that its new experimental anti-obesity pill could be more effective than its existing Wegovy injection.

The European Central Bank (ECB) is expected to slash rates again by 25 basis points on Thursday, a move that would mark the first cut since June, when it described the potential for a September reduction as “wide open.”

The ECB’s key interest rate — which helps to price all sorts of loans and mortgages across the bloc — is currently at 3.75% after years of aggressive hikes.

The ECB’s meeting comes just days ahead of the U.S. Federal Reserve’s Sept. 17-18 meeting, at which it’s expected to begin its own rate-cutting cycle.

Read more

European Central Bank set to cut interest rates just days before the Fed’s big decision

European investors are also digesting the latest consumer price index report from the U.S. that reflected a 0.2% increase in consumer prices in August, putting the annual inflation rate at 2.5% — its lowest level since February 2021.

Month-over-month core CPI — which does not include volatile food and energy prices — came out slightly hotter than expected, however. U.S. markets rose Wednesday as investors assessed what the data means for Fed policy.

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U.S. stock futures inched lower overnight as investors braced themselves for more inflation and labor data, with the August producer price index due Thursday before jobless claims data. Economists polled by Dow Jones anticipate a rise of 0.2% last month in the headline and core readings, up from 0.1% and 0.0% previously.

Initial jobless claims data for the week ending Sept. 7 are also due, and expected to have slid to 225,000, down from 227,000 the previous week, according to Dow Jones.

There are no other major earnings or data releases in Europe on Thursday.

Source : cnbc