European stocks close higher
The Stoxx 600 index provisionally closed 0.24% higher on Thursday, marking a second day of gains as investors remain cautiously optimistic that the European Union will strike a trade agreement with the U.S. before an Aug. 1 deadline.
However, enthusiasm cooled slightly from Wednesday, with the tariff-sensitive autos sector up just 0.13%. EU officials told CNBC that a deal is still not guaranteed, even as expectations mount for the U.S. to impose a 15% baseline tariff rate on imports from the bloc, with some sector exemptions.
The European Central Bank held interest rates on Thursday after a run of cuts took its key deposit facility to 2% from 4%. ECB President Christine Lagarde described policymakers as being in “wait and watch” mode while the economic backdrop remains highly uncertain.
European stocks falter after ECB rate hold
Financial markets are still reacting to the European Central Bank holding interest rates steady, a move that was widely anticipated.
The pan-European Stoxx 600 was last seen trading up 0.2%, paring gains seen earlier in Thursday’s session.
Euro zone government borrowing costs rise
Yields on regional government bonds edged higher after the European Central Bank’s interest rate hold, with the yield on the German 10-year bund — seen as a benchmark for the euro zone — up by almost 9 basis points at 1:43 p.m. in London (8:43 a.m. ET).
Bond yields and prices move in opposite directions.
French, Italian and Spanish 10-year government bonds also saw their yields rise by 8 basis points.
The euro was down 0.2% against the U.S. dollar after the European Central Bank held interest rates steady on Thursday.
The European currency continued to move lower following the widely anticipated decision from policymakers.
The European Central Bank on Thursday kept interest rates steady amid major economic uncertainty, as the European Union scrambles to negotiate a trade agreement with the U.S. before the end of the month.
The ECB has cut interest rates at each of its four meetings so far this year, taking its key deposit facility from 3% in January to 2% in June. Last year it reduced rates from a record high of 4%.
“The environment remains exceptionally uncertain, especially because of trade disputes,” the ECB said in a statement.
Dassault Systemes shares fall after earnings miss
Shares of French software giant Dassault Systemes fell 9.4% by 12:05 p.m. in London (7:05 a.m. ET), following the publication of the company’s second quarter earnings.
In the three months to June, constant currency revenue rose 5% year-on-year to reach 1.52 billion euros ($1.8 billion) — but analysts had been expecting quarterly revenue to hit 1.55 billion euros in the reporting period, according to LSEG data.
Dassault confirmed its full-year guidance of revenue growth within the range of 6% and 8%.
