Global Stock Market News

The Bank of Japan's recent shift to negative rates has fuelled concerns that ever-more exotic monetary policy is rapidly reaching the point of diminishing returns.

Yet murmurings about the risk of recession in the United Sates has also led investors to wager the Federal Reserve will have to slow, or suspend altogether, plans to normalise rates.

Futures markets have priced out any chance of a hike in March and imply a funds rate of just 0.43 percent by December <0#FF:>. The current effective funds rate is 0.38 percent.

That has pulled down 10-year Treasury yields to their lowest since early 2015 at 1.69 percent US10YT=RR and undermined bullish bets on the U.S. dollar.

It touched a six-week trough on the Swiss franc CHF=, while the euro edged up to $1.1217 EUR=. Against a basket of currencies, the dollar eased 0.1 percent to 96.485 .DXY.

The dollar dived as far as to 114.205 yen JPY=, having been above 121 just a week ago, while the euro fell as much as one percent to 128.31 yen EURJPY=.

The yield on Japan's benchmark 10-year government bond JP10YTN=JBTC turned negative for the first time as the Nikkei stock index tumbled.

The 10-year JGB yield touched minus 0.010 percent. It was the first time a G7 nation's 10-year government bond yield has turned negative, although yields on German bunds have come relatively close.

With more and more sovereign bonds paying negative rates, the relative cost of holding gold has seemed less and less of a burden. The metal XAU= reached its strongest since June at $1,200.60 an ounce, and last traded at $1,193.60.

Oil prices bounced slightly after three sessions of losses. Brent futures LCOc1 added 11 cents to $32.99 a barrel, while U.S. crude CLc1 rose 34 cents at $30.03.

Global Stock Market News

D.R. Horton (DHI.N) shares fell 4.7 percent to $26.40 as the No. 1 U.S. homebuilder reported lower-than-expected revenue as its home sales fell in all regions but the Southeast.

Tyco International (TYC.N) jumped 11.6 percent to $34.15 after Johnson Controls (JCI.N) said it would merge with the Ireland-based fire protection and security systems maker. Johnson Controls dropped 3.9 percent to $34.21.

Shares of Dynegy (DYN.N) and NRG Energy (NRG.N) slumped 11.5 percent and 9.6 percent, respectively, after the U.S. Supreme Court upheld a major Obama administration electricity markets regulation.

Caterpillar (CAT.N) dropped 5 percent to $57.91 after Goldman Sachs cut its rating on the stock to "sell".

Twitter (TWTR.N) fell 4.6 percent to $17.02 after Chief Executive Jack Dorsey said four senior executives would leave the social media company.

About 7.9 billion shares changed hands on U.S. exchanges, slightly below the 8.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Declining issues outnumbered advancing ones on the NYSE by 2,642 to 466, for a 5.67-to-1 ratio on the downside; on the Nasdaq, 2,132 issues fell and 716 advanced for a 2.98-to-1 ratio favoring decliners.

The S&P 500 posted 3 new 52-week highs and 22 new lows; the Nasdaq recorded 12 new highs and 103 new lows.

Global Stock Market News

The S&P 500 gained 1.7 percent, led by a 4.5 percent rise in the energy sector.

The U.S. market was also helped by comments from St. Louis Federal Reserve President James Bullard that the continued rout in global oil markets has caused a "worrisome" drop in U.S. inflation expectations that may make further rate hikes hard to justify.

U.S. retail sales data due later on Friday will be on investors' radar as they try to gauge the likelihood of the Fed raising rates in March.

In the currency market, the yen advanced after earlier losses on a resumption of demand for the safe haven currency.

The dollar slipped 0.1 percent to 117.89 yen, after earlier rebounding from a 4 1/2-month low of 116.70 yen hit on Monday.The euro advanced 0.1 percent, fetching $1.0879.

The European Central Bank said it saw scope for further cuts in its deposit rate in minutes of its December meeting, but many ECB policymakers appeared sceptical about the need for further action in the near term.

Commodity-linked currencies retreated after their earlier gains, with the Australian dollar slipping 0.4 percent to $0.6957, compared with Thursday's four-month low of $0.6910.

Saudi Arabian shares, one of the worst performing market along with China so far this year, hit five-year lows on Thursday.

Low oil prices not only hurt many oil-producing countries but also prompt their sovereign wealth funds to sell assets to finance budget gaps, putting pressure on many assets.

Global Stock Market News

Both the Dow .DJI and the S&P 500 .SPX had their worst five-day starts in history last week, and the corporate news flow is unlikely to get any cheerier with the coming results season expected to be a tough one.

 

S&P 500 earnings are forecast to have dropped 4.2 percent in the fourth quarter, a second straight quarterly decline led by the hard-hit energy and materials sectors.

The pain in stocks and worries over China even outweighed the positive impact of December's upbeat U.S. payrolls report and burnished the appeal of higher-rated government bonds.

Yields on 3-, 7-, and 10-year U.S. Treasuries all had their biggest weekly declines since early October last year, while five-year yields dropped by the most since Sept. 2013.

The gains continued on Monday with U.S. 10-year Treasury futures TYc1 up 3 ticks, while Fed fund futures <0#FF:> were pricing in a slightly shallower upward path for rates.

In currency markets, the main early news was the yen which is often favored in times of stress as Japan remains the world's largest creditor nation.

The dollar initially fell half a yen to a near five-five month low of 116.70 yen JPY=, before steadying around 117.22.

Dealers said Japanese investors seemed to be bailing out of long positions in the South African rand by selling rand for dollars and then those dollars for yen.

That saw the dollar surge as much as 10.3 percent at one stage to 17.9950 rand ZAR=D3, before tracking back to 16.6780. That was still up from 16.3150 late on Friday.

The euro started firmer but soon softened to $1.0917 EUR= while the dollar index was all but flat at 98.476 .DXY.

Global Stock Market News

Wall Street also had a gloomy session, with the S&P 500 .SPX losing 2.4 percent on Thursday, with 40 percent of the stocks in the benchmark trading 20 percent or more off of their highs, the definition of a bear market.

That was despite a drop in layoffs and the number of Americans filing for jobless benefits, pointing to a strong December employment report on Friday.

After the U.S. market close, two Apple suppliers added to growing worries about slowing shipments of iPhone 6S and 6S Plus by cutting their revenue estimates for the third quarter.
The Chinese moves offered a leg up to oil futures, with both Brent crude and U.S. oil rallying more than 2 percent.

Brent LCOc1 gained 2.2 percent to $34.49 after touching $32.16 on Thursday, the lowest since April 2004. The gains narrowed losses for the week to 7.5 percent.

West Texas Crude CLC1 advanced 2.1 percent to $33.98, on track for a weekly loss of 8.3 percent.
The shaky risk appetite seen this week sent investors flocking to low-risk assets such as bonds, gold and traditional safe-haven currencies, although that demand eased slightly on Friday.

The 10-year U.S. Treasuries' yield fell to a 2 1/2-month low of 2.119 percent US10YT=RR on Thursday and last stood at 2.1720 percent.

Gold eased back to $1,103.45 after earlier rising to $1,112 XAU=, the highest since Nov. 4. That brought gains for this year to 4 percent.

The yen pulled back from Thursday's 4 1/2-month high of 117.33 yen JPY=, last trading at 118.35 yen. The euro slipped 0.5 percent to $1.0880 EUR=.

The Australian dollar, often used as a liquid proxy for China trade, strengthened to $0.7055 after falling to a three-month low of $0.6981 AUD=D4 on Thursday. It's down 3.1 percent this year

Global Stock Market News

The yuan's weakness, the cooling economy and renewed stock market volatility have put China and its policymaking decisions clearly at the forefront of global risks at the start of 2016, along with the pace of expected U.S. interest rate rises and weak commodity prices.

Shanghai shares .SSEC were last up 0.7 percent after a report that China may extend a ban on share sales by listed companies' major shareholders until new rules are promulgated.

Shen Weizheng, fund manager at Shanghai-based Ivy Capital, said extending share sale restrictions would prolong market bearishness.

The dollar touched a near three-month low of 118.35 yen JPY= and the euro slid to a nine-month trough of 127.465 yen EURJPY=. The 10-year U.S. Treasury yield US10YT=RR fell by about three basis points to 2.22 percent.

The euro steadied at $1.0744 EUR= as the dollar dipped against the yen, after it hit a one-month trough of $1.0711 overnight.

In commodities, crude oil prices struggled near 11-year lows and added to the risk-off mood, with the market more worried about the stronger dollar and swelling U.S. inventories rather than growing tensions between Saudi Arabia and Iran.

Brent crude LCOc1 inched up 0.2 percent to $36.49 a barrel, still in reach of the 11-year trough of $35.98 hit late last month.

Global Stock Market News - The Dollar Held Steady

Surveys of manufacturers across the globe out on Monday had found activity anemic at best, with China and the United states both surprising on the downside. 

That was one reason both the S&P 500 .SPX and the Nasdaq .IXIC suffered their worst starts to a year since 2001. [.N]

"Global growth and geopolitical stability remain the main sources of concern."

A South Korean finance ministry official on Tuesday said the government will take action to stabilize markets if needed.

Sweden on Monday gave its central bank chief formal powers to act immediately to weaken the crown and help push up inflation, a radical step among developed world institutions.

The European Central Bank was under pressure to do yet more after German inflation proved surprisingly weak in December, pushing down bond yields and slugging the euro.

The common currency held steady around $1.0831 EUR= on Tuesday, having touched a one-month low around $1.0780. Against ,

The dollar held steady, at 98.831 against a basket of currencies .DXY and at 119.41 against the yen JPY=.

Oil prices edged up on Tuesday as investors pondered the long run implications of the rift between Saudi Arabia and Iran.

Brent LCOc1 was quoted 0.3 percent firmer at $37.32 a barrel, while U.S. crude added 0.4 percent to $37.90.

Global stocks rise but oil

Stocks rose in Europe and Asia on Tuesday, though volatile oil prices kept investors cautious before a widely anticipated increase in U.S. interest rates later in the week.

Oil prices resumed their fall and the euro rose against the dollar. Concerns in the high-risk U.S. corporate debt market about the potential impact of a rate hike weighed on low-rated euro zone government bonds.

European shares opened higher after hitting 2-1/2-month lows on Monday when oil prices fell to their weakest since 2008. The pan-European FTSEurofirst 300 index .FTEU3 rose 1.2 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up about 0.1 percent. Japan's Nikkei stock index .N225 ended down 1.7 percent at a 7-1/2-week low and Chinese stocks .SSEC .CSI300 lost 0.3-0.5 percent.

On Monday, U.S. stocks ended higher as oil pulled off its lows. However, Brent crude LCOc1 dropped 25 cents a barrel to $37.67 on Tuesday after falling the previous day to as low as $36.33, its weakest since December 2008. A fall below $36.20 would take it back to levels last seen in mid-2004.

The first U.S. rate rise since 2006 is largely priced in, with the Fed expected to increase its targeted rate range to 0.25-0.5 percent from the current zero to 0.25 percent.

The dollar index .DXY, which measures the U.S. currency against a basket of its peers, fell 0.2 percent. The euro EUR= rose 0.4 percent to $1.1031 while the yen JPY= gained 0.2 percent to 120.83 per dollar.

Global Market News

The Chinese yuan headed in the opposite direction with the central bank setting the midpoint at a more than four-year low for a second day, a sign that Beijing is quietly permitting the currency to depreciate after it was included in the IMF's reserve basket.

The People's Bank of China set the midpoint rate CNY=SAEC at 6.4236 per dollar prior to market open, 0.1 percent weaker than the previous fix of 6.4140. 

The spot marketCNY=CFXS opened at 6.4300 per dollar, its weakest since Aug. 12, and was changing hands at 6.4385, compared with the previous close of 6.4280.

The dollar fetched 121.63 yen JPY= after tumbling overnight to a 1-month low of 121.07 yen as the Japanese currency attracted safe haven bids amid the ongoing rout in commodities.

With the greenback on the back foot against the euro and yen, the dollar index .DXY hovered near a 1-month low of 97.223 struck overnight.

The U.S. currency was hurt as Treasury yields fell on a flight to safety to government debt, prompted by falling oil prices and a decline on Wall Street.

The S&P 500 .SPX tracked weaker commodities and lost 0.8 percent on Wednesday, while the Dow .DJI lost 0.4 percent and the Nasdaq .IXIC shed 1.5 percent.

Global Stock Market News

On the currencies front, action around the China trade data was brief with the Australian dollar settling to new intraday lows, at $0.7224 AUD=D4 and receding further from a 3-1/2 month high of $0.7386 touched on Friday.

The euro was on the back foot as the short-covering rally following last week's less-than-aggressive stimulus from European Central Bank ran its course.

The common currency stood at $1.08560 EUR=, having slipped from its one-month high of $1.0981 set on Thursday. The yen was little changed so far at 123.11 per dollar JPY=.

The offshore Chinese yuan CNH=D4 traded at a three-month low of 6.4930 per dollar despite another lower-than-expected fixing by China's central bank.

Long-dated U.S. Treasury debt prices held firm after rallying on Monday as the drop in oil prices pointed to benign inflation, potentially tempering the Fed's policy tightening path after the expected lift-off on Dec. 16.

The 10-year U.S. debt yield fell to 2.216 percent US10YT=RR, off one-month high of 2.358 percent touched on Friday following strong U.S. employment data.

Global Stock Market News

European markets look set for a rosier open, with financial spreadbetters expecting Britain's FTSE 100 .FTSE and France's CAC 40 .FCHI to start the day up 0.4 percent and Germany's DAX .GDAXI to climb 0.3 percent on the open.

Wall Street had offered no direction as the Dow .DJI ended Tuesday with a slight gain of 0.16 percent. The S&P 500 .SPX added 0.15 percent and the Nasdaq .IXIC eased 0.24 percent.

Weighing on the Nasdaq, Apple shares (AAPL.O) fell 3 percent after Credit Suisse said the iPhone maker had lowered component orders by as much as 10 percent.

In currency markets, the euro struggled as political uncertainty in Portugal provided an excuse to sell in a market already bracing for further monetary policy easing from the European Central Bank.

The common currency last stood at $1.0759 EUR=, having hit a six-month trough of $1.0673 on Tuesday.

The dollar index .DXY eased back form a seven-month peak to slip 0.4 percent to 98.883. The dollar ran into a little profit-taking against the yen, nudging it down 0.3 percent to 122.86 JPY=, from an early 123.15.

Benchmark 10-year Treasury yields US10YT=RR dipped a couple of basis points to 2.32 percent, but remain hostage to the chance of a Fed rate hike next month. Indeed, concerns are growing that another strong payrolls report could lead to rates rising at a faster pace than was currently priced in.

Oil prices resumed their decline on news U.S. crude stocks jumped last week. U.S. crude CLc1 lost 46 cents to $43.75 a barrel, while Brent LCOc1 shed 22 cents to $47.22.

World stock News - World Shares Rose

World stocks on course for best month in four years

World shares rose on Friday and were on course for their best month in four years, led by Europe's best month in over six years, as global central banks kept stimulus policies intact and many hinted at further steps to reenergize their economies.

That has helped soothe concern over higher borrowing costs in the United States as the Federal Reserve prepares to tighten rates, possibly by the end of the year.

Corporate earnings also boosted sentiment, with results from France's Renault (RENA.PA), BNP Paribas (BNPP.PA) and Airbus (AIR.PA) in particular getting the thumbs up from investors.

In early trade, the pan-European index of leading 300 shares was up 0.2 percent at 1,487 points .FTEU3, putting it on course for a rise of 8.5 percent over the course of October. That would be its best month since July 2009.

France's CAC 40 .FCHI and Germany's DAX .GDAXI were both up 0.4 percent, while Britain's FTSE 100 .FTSE was flat as investors reacted negatively to earnings from Royal Bank of Scotland (RBS.L) and British Airways operator IAG (ICAG.L).

The dollar slipped for a second day, notably against the yen after the Bank of Japan left policy unchanged. Government bond yields also slipped back after two days of Fed-fueled increases.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.1 percent but poised to gain more than 7 percent for October, its best showing since January 2012.

Japan's Nikkei stock index .N225 ended up 0.8 percent, its highest in more than two months, buoyed by a media report that the government is considering a supplementary budget of over $25 billion.

Global Stock Market News - Wall Street

On Wall Street overnight, U.S. indexes posted losses but were still on track for their best monthly performance in four years. 

U.S. data released overnight showed U.S. gross domestic product in July-September increased at a 1.5 percent annual rate, just shy of the consensus forecast for 1.6 percent growth and slowing from a 3.9 percent rise in the second quarter.

The U.S. central bank held policy steady on Wednesday and left the door open to hike interest rates for the first time since 2006 at its Dec. 15-16 meeting.

That signal comes amid growing anxiety over a slowdown in global growth, with signs of waning momentum in China in particular stoking volatility in global markets in recent months.

Markets in China edged higher, while shares of baby goods-related companies outperformed after China's ruling Communist Party said on Thursday it would ease family planning restrictions to allow two children for all couples.

The dollar extended losses after the BOJ policy decision, slipping to an intraday low of 120.29, and was last down about 0.1 percent at 120.99 yen JPY=. But it was still up about 0.9 percent for the month against the backdrop of divergent monetary policy expectations.

The euro's trend was similar, with the single currency up abut 0.1 percent against the dollar at $1.0988 EUR= but down about 1.7 percent for the month in which European Central Bank chief Mario Draghi took a surprisingly dovish stance that suggested further monetary easing steps were possible in December.

Crude oil futures slipped after the mixed U.S. economic data exacerbated fears of oversupply and as investors took profits following a rally, but they were still on track to end a volatile week with gains.

Global Stock Market News - The European Central Bank

The dollar declined 0.3 percent to 120.77 yen JPY= after spiking as high as 121.26 on Wednesday from a session low of 120.02.

U.S. Dollar

The dollar index .DXY, which tracks the U.S. currency against a basket of six of its major peers, fell about 0.3 percent to 97.519, but remained near the 2-1/2-month peak of 97.818 scaled after the Fed's statement.

The euro reversed earlier losses, gaining about 0.2 percent to $1.0938 EUR= after skidding to a 2-1/2 month low of $1.0826 overnight.

The European Central Bank last week signaled its readiness to inject more stimulus to boost prices and the People's Bank of China followed with its sixth interest rate cut in less than a year and a reduction in the amount of cash banks must hold as reserves.

Investors are speculating that the Bank of Japan could also expand its easing steps to keep economic recovery on track, but unexpectedly strong industrial output data on Thursday reduced the chance of the BOJ acting at its meeting on Friday.

Japan's Nikkei .N225, which swung between gains and losses, ended the day up 0.2 percent.

The Reserve Bank of New Zealand kept interest rates steady on Thursday as expected but reiterated that some further easing seemed likely eventually.

The New Zealand dollar dropped about 0.5 percent to $0.6663.

U.S. crude oil futures shrugged off the stronger dollar and retained most of their gains after soaring more than 6 percent overnight as the government reported an inventory build-up, which triggered a short-covering rally after three days of losses.

U.S. crude CLc1 fell about 0.6 percent to $45.67 a barrel. Brent LCOc1 slipped 0.6 percent to $48.78.

Spot gold XAU= edged up about 0.5 percent in Asian trade to $1,161.71 an ounce, after skidding more than 1 percent in the previous session in the wake of the Fed's hawkish message.

U.S. Stock Market News - Global Markets

Stock futures slip ahead of Fed meet; results in focus

U.S. stock index futures were slightly lower ahead of the start of a Federal Reserve policy meeting and as investors digested a barrage of earnings reports.

* Global markets fell as a four-week rally in China lost steam and weak results from major companies sent European stocks sliding.

* All eyes are on Apple (AAPL.O), which reports fourth-quarter results after the close, as investors await commentary on the iPhone maker's business in China and its forecast for the crucial holiday quarter.

* Alibaba (BABA.N) shares rose nearly 10 percent to $83.50 in premarket trading after the e-commerce giant reported better-than-expected revenue.

* Pharmaceutical majors Pfizer (PFE.N) and Merck (MRK.N) were little changed after they reported results.

* Ford (F.N) fell 1.5 percent, while Comcast (CMCSA.O) was down 2 percent after results.

* Twitter (TWTR.N) will post results after the close.

* Strong results from tech majors and blue chips have helped improve analyst sentiment on quarterly earnings.

* S&P 500 earnings are now expected to have declined 2.8 percent in the quarter, based on actual results from about 35 percent of companies and estimates for the rest, compared with a 4.2 percent decline forecast at the start of the month, according to Thomson Reuters data.

* The Fed begins its two-day policy meeting on Tuesday. Expectations of a rate increase this week are low, but investors will focus on the central bank's interpretation of economic data and global financial events.

* Data scheduled for release on Tuesday includes orders for U.S. durable goods for September, which is expected to have declined for the second straight month. The data is due at 8:30 a.m. ET.

Global Financial Markets - Currently Pricing

Investors are pricing in no chance of a rate hike this week, but could react to how the Fed's statement interprets recent soft U.S. economic data and events in global financial markets.

Markets are currently pricing in only a modest chance of a tightening in December.

On Wall Street, the Dow .DJI ended on Monday with a minor loss of 0.1 percent, while the S&P 500 .SPX eased 0.2 percent and the Nasdaq .IXIC added 0.1 percent. US stock index futures ESc1 were pointing to a weak start. [.N]

All eyes will be on Apple's (AAPL.O) results later Tuesday with investors anxious to hear how many new phones were sold by the world's most profitable company, and its guidance for the current quarter.

The U.S. dollar lost some of its recent gains following disappointing U.S. new home sales and a dip in Treasury yields. Against a basket of currencies, the dollar was off 0.2 percent at 96.692 .DXY.

The euro regained a little ground to $1.1065 EUR=, having touched an 11-week trough of $1.0987 on Monday. Against the yen, the dollar lapsed back to 120.55 JPY= from Monday's top around 121.51.

Commodity markets continued to be dogged by concerns over plentiful supplies and weak demand. Three-month copper CMCU3 was broadly flat at $5,206 a metric ton.

Crude oil stayed under pressure after two straight weeks of losses, on worries that the oversupply in oil products would swell from unseasonably warm weather and the waning maintenance cycle for U.S. refineries. [O/R]

U.S. crude CLc1 was down a percent at $43.45 a barrel, while Brent LCOc1 eased to $47.17 a barrel.

Global Stock Market News - Dollar Low In Asia

Dollar droops as equities come under pressure before Fed meeting

A bank clerk counting US dollar banknotes

The dollar was mostly lower in Asia on Tuesday, taking its cue from a broad move lower in regional equities and caution ahead of the U.S. Federal Reserve's two-day meeting that begins later in the session.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS skidded 0.7 percent, as China's key share indexes gave up more than 1 percent.

Adding to the risk-off mood, the U.S. Navy sent a destroyer within 12 nautical miles of artificial islands built by China in the South China Sea, in a challenge to Beijing's territorial claims there.

Frequently used as a China play because of Australia's significant trade with that country, the Aussie slipped about 0.1 percent to $0.7235 AUD=D4, and also shed about 0.6 percent on the 87.23 yen AUDJPY.

The greenback began the Asian session already on the back foot, after disappointing U.S. home sales data pushed down Treasury yields and prompted investors to pare bets that the Fed would opt to hike interest rates before year-end.

Data released on Monday showed new U.S. single-family home sales fell to near a one-year low in September after gaining for two straight months.

The disappointing figures backed expectations that the U.S. central bank will leave rates near zero on Wednesday, at the close of a two-day meeting beginning later in the session.

Against its Japanese counterpart, the dollar gave up about 0.4 percent to 120.58 yenJPY=, moving away from a 2-month high of 121.60 yen touched on Monday ahead of a Bank of Japan meeting on Friday.

Global stocks - European Shares

Global stocks hit two-month high on dovish Draghi message

The prospect of yet more European Central Bank stimulus pushed world stocks to a two-month high, the euro to a two-month low and left investors paying for the privilege of owning short-term Italian and Spanish bonds.

European shares and bonds kept climbing on Friday after soaring on Thursday's message from ECB chief Mario Draghi that the central bank was ready to adjust "the size, composition and duration" of its QE program.

It was set to be the fourth straight week of gains for MSCI's 45-country All World index .WORLD as the euro's nose dive back to $1.11 .DCY put the dollar on course for its biggest weekly rise against the major currencies since late May.

For investors hoping for a positive jolt to the lackluster global economic growth outlook, it was shaping up to be the second straight week of near 4 percent falls in oil prices LCOc1, which were edging higher on Friday.

The pan-European FTSEurofirst 300 index .FTEU3 rose 1 percent, building on a 2.1 percent gain in the previous session, while the euro zone's blue-chip Euro STOXX 50 index .STOXX50E advanced by 1.2 percent.

Bond market moves were perhaps the most eye-catching though. Italian IT2YT=TWEB and Spanish <ES2YT=TWEB > two-year government bond yields both turned negative for the first time ever, meaning that investors now pay to hold them rather than receive interest on them.

Greece's bond 'curve' was also close to normalizing, having been distorted for months in the wake of a political crisis.

Investors were spurred on by the prospect not only of the ECB increasing its bond buying but also of it cutting one of its main interest rates, the deposit rate, even further into negative territory.