European stocks steady after rate decision

Equities in the eurozone have held their gains after the European Central Bank announced that it will keep interest rates unchanged.

The ECB decided to keep interest rates at all-time low 0.25%, in line with expectations, reiterating its support for the stimulus package even though it is becoming less effective. Stocks in the eurozone are broadly unchanged on the back of this.

The Spanish government has held a successful bond auction; the yield on the 10-year bond has dropped to its lowest level since September 2006. This news comes two days after Ireland’s bond auction was well received.

Investors are looking ahead to tomorrow’s non-farm payrolls report and unemployment rate announcement. Yesterday’s ADP employment report exceeded expectations, and today’s initial jobless report pointed to an improving jobs market. The current rate of unemployment in the US is 7%; if tomorrow’s report drops again we could see stocks trade higher.

As Alastair McCaig stated yesterday, the DAX is in an upward trend, and strong reports from the US tomorrow could push the market towards the 9600 level.

Germany 30 chart

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