Europe close: Stocks continue to move higher, helped by dovish central banks
Stocks in Europe traded slightly higher on Thursday, tracking the record highs reached by Wall Street's main market gauges on the day before and helped by 'dovish' remarks from central bankers across the Continent.
Overnight there were also somewhat positive reports around progress in US-China trade talks and perhaps even as regarded the stand-off with Iran.
In an interview with Boersen Zeitung, European Central Bank governing council member, Olli Rehn, said that the slowdown in euro area growth was more than just a dip and that rate-setters should be ready to act, while in Russia the central bank Governor, Elvira Nabiullina, told the International Financial Congress in St.Petersburg that Bank of Russia might cut rates again at the end of the month.
Earlier, in a research note sent to clients, analysts at Rabobank said the recent flatenning in euro area government bond yield curves was justified given the move lower in inflation expectations.
"With many of the questions as regards Italy’s immediate future now answered and more broadly, the likelihood of President Draghi’s policies being extended, the street looks to be one way traffic only for the immediate future," they said.
"Though we have major concerns as regards where this will all end, the theme of our most recent Rabo Rate Directions piece 'Lower forever and buy everything' merely suggests that standing in the way of the rally will hurt."
By the end of trading, the benchmark Stoxx 600 was 0.11% higher to 393.02, alongside a 0.96% rise to 22,115.69 for the FTSE Mibtel while the Dax was edging up by 0.12% to 12,631.21.
To take note of, US markets remained closed on Thursday in observance of the 4 July holiday, with many traders in fact absent from their desks on both sides of the Atlantic.
Overnight US National Economic Council director, Larry Kudlow said US and Chinese trade officials "will be on the phone this coming week", Bloomberg reported.
Nevertheless, on Thursday morning, a Chinese Commerce Ministry spokesman said the US would have to lift its punitive tariffs in order to reach a deal.
Dampening sentiment perhaps, also overnight the US President accused the euro area and China of artificially weakening their currencies versus the US dollar.
On another front, Iranian state news agency IRNA cited the country's top intelligence official, Mahmoud Alavi, as saying that Tehran could only hold talks with Washington if the US ended its sanctions and if the Ayatollah Ali Khamenei consented.
But, Alavi continued: "Americans were scared of Iran's military power, that is the reason behind their decision to abort the decision to attack Iran."
The flow of economic news was thin and what was to be had was rather lacklustre.
According to Eurostat, retail sales within the single currency bloc shrank at a 0.3% month-on-month pace in May (consensus: 0.4%), following a downwardly revised dip of 0.1% in the month before.