By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks were higher and the euro
slipped Thursday, with investors waiting for a European Central
Bank news conference that could indicate whether the central bank
will ramp up its stimulus efforts.
The Stoxx Europe 600 was up 0.2% to 349.90, aided by gains among
travel stocks. Ryanair Holdings PLC rallied 7.9% after the budget
carrier raised its full-year profit forecast on strong figures from
the November period. TUI Travel PLC shares surged 3.6% as the
vacation-packages company's fiscal 2014 underlying operating profit
came in above its recently raised outlook.
The Stoxx 600 on Wednesday marked its highest close since early
June, rising 0.6% to 349.34.
Thursday's marquee event will be the ECB's policy statement, due
at 12:45 p.m. London time, or 7:45 a.m. Eastern Time, followed by a
news conference at 1:30 p.m. with ECB President Mario Draghi.
Draghi late last month said the ECB will do what it "must to
raise inflation and inflation expectations as fast as possible".
Those comments were seen as a sign the ECB will increase asset
buying to bolster inflation levels and encourage economic growth in
the struggling eurozone. There's also been speculation that the ECB
could consider purchasing corporate bonds. Read a preview of ECB
meeting.
However, RBC Capital Markets said the bank's Governing Council
likely wants to see results from a Dec. 11 targeted long-term
refinancing operation, also known as TLTRO, before making any
policy changes. In the first round of TLTRO, eurozone banks
borrowed a lower-than-expected 82.6 billion euros ($101.9
billion).
"[U]nless the uptake in [the December] operation is much higher
than anticipated, we think the ECB will be forced to expand its
asset-purchase programs into a wider range of securities in the
first quarter of 2015," said Sue Trinh, senior currency strategist
at RBC Capital Markets, in a note early Thursday.
"So, in order to pave the way for that (and consistent with a
probable large downgrade to the staff's macroeconomic projections
next week), we expect President Draghi to emphasize the governing
council's willingness and readiness to act," she said.
The euro (EURUSD) languished at two-year lows against the U.S.
dollar on the prospect of more asset-buying by the central bank.
The euro was buying $1.232 compared with $1.2311 late Wednesday in
North American trade.
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