Europe midday: Stocks waver ahead of ECB rate announcement

At midday, the benchmark Stoxx Europe 600 index was flat, Germany’s DAX was down 0.2% and France’s CAC 40 was 0.1% lower.

At the same time, oil prices advanced. West Texas Intermediate was up 1.7% to $46.27 a barrel and Brent crude was 1.4% firmer at $48.66.

The tone was underpinned by better-than-expected Chinese trade data, which showed imports rose 1.5% in August compared to a year ago, versus forecasts of a 4.9% decline. This was also a big improvement on the 12.5% fall seen in July. Meanwhile, exports dropped 2.8% following a 4.4% slide the month before.

The ECB rate announcement is at 1245 BST, with the press conference at 1330 BST.

Societe Generale said: “With euro area economic data showing resilience to the Brexit vote and an expected rise in headline inflation, we see little chance of further major stimulus. Instead, we expect the ECB to enter a period of managing expectations as the deflationary threat fades, with sufficient concern over the potential negative long-term implications of the unconventional policies allowing for an exit debate to emerge next year.

“Today, we expect the announcement of a six-month extension of the asset purchase programme to ‘at least until September 2017’, and a modification to the purchase limits (we believe raising the issue share limit is the easiest, but recent ideas put forward by Cœuré on increased safe asset issuance are worth close monitoring).”

In corporate news, electronics retailer Dixons Carphone rose after it said group revenue was up 9% year-on-year in the first quarter and like-for-like revenue improved 4% in the 13 weeks to 30 July.

Micro Focus International surged after agreeing an $8.8bn deal to merge with Hewlett Packard's software business, which includes a $400m return of value to the FTSE 100 company's' shareholders.

Dutch semiconductor equipment maker ASML was on the back foot as Samsung Electronics said it was selling shares in the company.

Investors will also watch for the release of US initial jobless claims at 1330 BST.