By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks gained Thursday, with
investors gearing up to hear more on monetary policy and the state
of the eurozone economy from the European Central Bank.
The Stoxx Europe 600 rose 0.4% to 392.12. The pan-European
benchmark on Wednesday
(http://www.marketwatch.com/story/european-stocks-waver-after-mixed-eurozone-data-2015-03-04)
struggled for direction but managed to pull out a win by rising
0.8%.
"Markets have been a bit choppy," this week ahead of the ECB
meeting and the highly anticipated U.S. jobs data for February due
on Friday, said Richard Perry, market analyst at Hantec Markets.
Many regional equity indexes have been easing back from recently
hit record or multiyear highs.
The ECB will release its policy statement on interest rates at
12.45 p.m. London time, or 7.45 a.m. Eastern Time. That will be
followed by a 1.30 p.m. press conference in Cyprus with ECB
President Mario Draghi, who "is expected to put more meat on the
bones of the ECB's quantitative easing program of EUR1.1 trillion
over the next 18 months. It is likely that the ECB will begin to
purchase assets after the meeting," said Perry. Read: 5 things to
know about the ECB's QE program
(http://www.marketwatch.com/story/5-things-for-investors-to-know-about-the-ecbs-qe-ahead-of-thursdays-meeting-2015-03-04).
Ahead of the ECB statement, data from Germany showed
manufacturing orders in January fell by 3.9%
(http://www.marketwatch.com/story/german-manufacturing-orders-fall-by-39-2015-03-05)
in adjusted terms, a bigger decline than the 1% pullback expected
by analysts polled by The Wall Street Journal. But Germany's
economy ministry slightly lifted the previously announced December
figure, showing growth at a 4.4% rate, compared with the 4.2%
initially reported.
On the major benchmarks, Germany's DAX 30 rose 0.3% to
11,419.34, and France's CAC 40 rose 0.5% to 4,941.62. The U.K.'s
FTSE 100 picked up 0.1% to 6,927.91
(http://www.marketwatch.com/story/ftse-100-wobbles-as-aviva-rises-admiral-falls-boe-statement-on-tap-2015-03-05).
The Bank of England is expected to hold its key interest rate
steady at 0.5% when it releases its policy statement at 12 p.m.
London time.
The euro (EURUSD) was buying $1.1045, down from Wednesday's
level of around $1.1081. At the same time the ECB is launching QE,
the U.S. Federal Reserve looks ready to raise interest rates this
year. This serves as a "reminder of this divergence" between the
paths taken by the two central banks and is driving the euro to
11-year lows against the greenback, said Kathy Lien, managing
director of FX strategy at BK Asset Management, in a note
Wednesday.
How far the euro falls against the dollar will be determined by
Draghi's level of dovishness and pessimism, said Lien. In light of
recent improvement in eurozone data and positive comments from
Draghi, "we continue to believe that the currency pair is near a
bottom. The euro will rebound if the ECB upgrades its growth
forecast," she said.
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