Set for modestly higher open, investors await ECB rate decision

Alex Kraus | Bloomberg via Getty Images

Mario Draghi, president of the European Central Bank (ECB), at the European Banking Congress on the final day of Frankfurt Finance Week in Frankfurt, Germany, on November 17, 2017.

Markets in Europe are expected to open slightly higher on Thursday, as investors exercise caution given the threat of a trade war between the European Union and U.S. and as they await the latest interest rate decision from the European Central Bank (ECB).

The German DAX is set to climb the most at Thursday’s open, seen up 23 points at 12,268. Meanwhile, the French CAC is anticipated to open 16 points higher at 5,204. The U.K. FTSE is expected to open flat, at 7,158, according to IG.

The ECB is to hold its routine governing council meeting on monetary policy in Frankfurt. The central bank’s latest decision on monetary policy is due at 13:45 CET and ECB President Mario Draghi will speak at a press conference at 14:30 CET. He is expected to strike a cautious tone given the recent surge in economic uncertainty and give few clues as to the future of the institution’s massive bond-buying scheme.

Market sentiment could also be affected by the threat of a trade war between Europe and the U.S. over aluminium and steel tariffs proposed by President Donald Trump. An Italian election result Monday which revealed a surge in non-mainstream parties and resulted in a hung parliament has also worried investors this week.

Meanwhile, Saudi Crown Prince Mohammed bin Salman will continue his state visit to the U.K. The two countries Wednesday announced their intention to establish £65 billion ($90.29 billion) of trade and investment links in the next few years.

Thursday is busy on the corporate front in Europe. From Germany, health care firm Merck is to release its fourth quarter results, while tyre maker Continental will release preliminary full year results. Luxury fashion brand Hugo Boss will release its full year earnings report.

Out of the U.K., John Lewis and the Co-Operative Bank will post full year results. Insurance firm Aviva, security company G4S and Domino’s Pizza Group will report preliminary full year earnings.

Elsewhere in Europe, French utility Engie and supermarket Casino, as well as Dutch paintmaker Akzonobel will also publish financial data.