A look at the day ahead in European and global markets from Vidya Ranganathan
Federal Reserve Chair Jerome Powell was unambiguous overnight, but the European Central Bank meets today and is more divided and hesitant about committing to monetary easing.
The ECB is universally expected to keep its policy rate at a record 4.0%, and policymakers are likely to repeat that they need more evidence inflation is under control and that ongoing wage increases will not give it another leg up.
ECB President Christine Lagarde's message will be key, for new economic projections are likely to point to lower economic growth and inflation this year, which may require the central bank to tweak its message slightly.
Investors have pencilled in three or probably four rate cuts by the end of the year.
Interest rate futures are almost fully priced in for a first rate cut from the ECB in June, with a total easing of 88 basis points expected for all of this year. That's more realistic than the 150 bps markets were expecting in January.
German data on factory orders and production is due later, and should reinforce the weakness in the euro zone's largest economy and the reason the ECB is so divided.
Meanwhile, Asia is extending the broad rally in global stocks and risk assets after Powell kept the door open to interest rate cuts later this year and U.S. bond yields drifted lower
Powell stuck to script by saying the Fed still expects to cut rates later this year, even though continued progress on inflation "is not assured".
Japan's Nikkei, however, is down as the yen jumps to near 149 per dollar, its highest in a month, as momentum builds that a move from the Bank of Japan to end negative interest rates could come as soon as this month.
Key developments that could influence markets on Thursday:
CENTRAL BANKS-ECB rate decision at 1315 GMT, Lagarde press conference at 1345 GMT
DATA - German industrial orders, UK Halifax house prices
DEBT AUCTIONS - France: Reopening of 10-year 2033, 10-year 2034, 14-year and 21-year government debt auctions
EARNINGS - Admiral Group (LON:ADML), Continental AG (ETR:CONG), Deutsche Lufthansa (ETR:LHAG) AG, Hugo Boss AG, ITV (LON:ITV) PLC, Merck KGaA
(By Vidya Ranganathan; Editing by Jacqueline Wong)