European stocks rally as investors await ECB decision, tech earnings
Traders awaited the European Central Bank’s next move and earnings results from Amazon and Intel after Alphabet’s shares were hit by concerns over AI spending.
European government bond and stock markets experienced a rally on Thursday as traders waited for the European Central Bank's next move and awaited results from Amazon and Intel. Alphabet's shares, which were hit by worries about AI spending, saw their value decline due to heavy cash burn. Both the euro and euro zone government bond market yields were decreasing, while oil and natural gas prices were also dropping.
ECB President Christine Lagarde announced her departure from the ECB early in February. US Treasuries had a rally after Federal Reserve Chair Kevin Warsh expressed a more confident stance regarding inflation, keeping rates unchanged. RBC's European Macro Strategist George Moran expects the ECB to maintain rates at 2.50%, with a potential final hike to 2.75% in December.
France's sovereign spreads are widening, providing the ECB with some room to avoid further aggressive tightening. The euro was trading at approximately 1.1137 against the US dollar.
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