European stocks will be in focus today with investors monitoring Brexit trade talks.
Context: European stocks closed mostly lower on Thursday following the ECB’s recent policy decision and fresh stimulus measures.
Details: As widely expected, the ECB announced plans to increase the size of its monetary stimulus purchase program by €500 billion to €1.85 trillion. The bank also extended the time horizon of its scheme to March 2022 to provide adequate support to the coronavirus-hit economy.
The ECB also maintained its main refinancing rate at 0% and its marginal lending facility rate at 0.25%.
Meanwhile, policymakers lowered their economic growth projections for the region, from September’s forecast of 5% growth to merely 3.9% in 2021. Inflation expectations were also lowered, with policymakers projecting inflation rising to 1.1% by 2022, versus their previous forecast of 1.3%.
Markets were keeping an eye on Brexit trade talks, with fishing and competition rules remaining the key issues for the deal. British Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen held a meeting and committed to ending Brexit trade talks by Sunday.
On the economic data front, the UK reported GDP growth of 0.4% for October, a slowdown from September’s 1.1% growth. Investor sentiment was also dampened by the continued rise in covid-19 infections across the world, with the US reporting a record 3,054 deaths on Wednesday.
The pan-European Stoxx 600 index fell 0.44% on Thursday, with banking stocks leading the decline. However, oil and gas shares bucked the trend to record gains of around 1.5%.
The German DAX 30 fell 0.33% on Thursday, while the FTSE 100 and French 40 gained 0.54% and 0.05%, respectively.
What to watch: Investors will be monitoring the progress in the Brexit trade deal, with hopes of both sides reaching an agreement by the weekend.
Markets also await economic releases from various European nations, including Germany’s consumer prices, Spain’s consumer price index and Italy's industrial production.
Covid-19 remains a major concern for the markets, with total cases surpassing 69.5 million worldwide.
Other Markets: US indices closed mostly lower on Thursday, with the Dow Jones index and S&P 500 down by 0.23% and 0.13%, respectively, and the Nasdaq 100 gaining 0.54%.