Investing.com – European stock markets are seen opening marginally higher Thursday, boosted by the final approval of the U.S. Covid-19 stimulus package, but with moves likely to be modest amid caution ahead of the European Central Bank’s policy meeting later.
European markets received a positive handover from Wall Street, with the Dow Jones Industrial Average benchmark posting a record close, after the House of Representatives gave its final approval to the Biden administration’s $1.9 trillion Covid relief package, one of the largest economic stimulus measures in U.S. history.
This stimulus package is expected to give the U.S. economy a significant boost during the second half of the year. Fears that it could lead to inflation, prompting the Federal Reserve to rein in its expansive monetary policies sooner than originally envisaged, were assuaged somewhat on Wednesday when consumer price inflation data released came in weaker than expected.
Attention in Europe will now turn to the latest meeting of the European Central Bank, as it’s due to hand down its policy decision at 7:45 AM ET (1245 GMT).
“The ECB will be pressed to clarify what it means by preserving favorable financing conditions and its thoughts about the recent increase in bond yields,” said analysts at Nordea, in a research note. “Mere words are unlikely to stop long bond yields from rising further.”
The ECB did in fact quicken the pace of bond purchases two weeks ago as the volatility in bond markets took off, but that was masked by the fact that it also had big redemptions from a bond-buying program from a decade ago.
In corporate news, Finnish telecom company Nokia (NYSE:NOK) be in focus after striking a deal with Samsung (KS:005930) to license patents covering its innovations in video standards, while earnings will be studied from the likes of Italian insurer Generali (MI:GASI), which has posted a string of post-pandemic highs in recent days.
Oil prices rose Thursday, as the latest data from the Energy Information Administration showed that domestic gasoline supplies slid last week, by almost 12 million barrels, to the lowest in about four months, while demand rose to the highest since November. Gains were tempered by crude inventories rising by 13.8 million barrels.
The U.S. oil industry continues to feel the impact of an unexpected cold snap that hit Texas and the surrounding areas in February, which led to stalled refining and forced production shutdowns in the area.