Europe open: Stocks gain on 'dovish' Fed despite bounce in single currency
Shares on the Continent are moving higher as investors wait on the minutes of the European Central Bank's last policy meeting following the unexpectedly dovish signals sent out by the head of the US central bank overnight.
Delivering his semiannual testimony before the US House Financial Services committee, Federal Reserve chairman, Jerome Powell, said there were risks that prices might persistently undershoot the central bank's inflation target and that the labour market was not running hot.
In particular, he pointed out that while the pace of wage gains had improved, they were barely equivalent to gains in labour productivity and inflation.
Financial markets were caught a bit by surprise by the Fed's 'dovishness', so that 'market chatter' on Thursday morning was again centred on whether rate-setters might even cut the target range for the Fed funds rate by 25 or 50 basis points when they next convened to decide on policy on 30-31 July.
As of 0847 BST, the benchmark Stoxx 600 was adding 0.30% to 388.33, alongside a rise of 0.14% to 12,391.72 for the German Dax while the Milan's FTSE Mibtel was putting on 0.67% to 22,193.34, although early gains in the single currency were hampering the advance in the region's main stock market gauges.
On that note, euro/dollar was adding to the previous session's bounce, rising by 0.23% to 1.12775 ahead of the release of the ECB's meeting minutes at 1230 BST.
Fed funds futures meanwhile were left on Wednesday evening pricing-in roughly 31% odds of a 50 basis point rate cut at the July FOMC.
Economic data was mixed, with Germany's Federal Office of Statistics marking up its preliminary reading for harmonised consumer prices in the euro area's largest economy in June, while in France, INSEE confirmed its own preliminary CPI estimate.
The year-on-year rate of German harmonised CPI was revised higher to show an advance of 1.5%, instead of the 1.3% gain that had been initially calculated.
In France, the harmonised rate of gain in June CPI was confirmed at 1.2% year-on-year, versus 0.9% for May.