More upbeat, the European Central Bank signals end to rate cuts

Europe in focus as ECB keeps rates on hold and Britain votes

It was later found that the euro suffered the move over a leaked inflation report, which was scheduled for publishing, during the interest rate decision of the European Central Bank (ECB).

Eurostat, the European Union's statistics agency, said Thursday that economic growth across the region was a quarterly 0.6 percent in the January to March period, 0.1 percentage point up on the previous estimate.

Shares of Alibaba Group Holding were up 11.5 percent at $140.08 in premarket trading after the company said it expects revenue growth of 45-49 percent in the 2018 fiscal year.

United States applications to buy a home reached their highest level in about seven years last week as mortgage rates fell to their lowest levels since late 2016, the Mortgage Bankers Association had said on Wednesday.

The evidence is piling up that the growth in the eurozone has kicked into a higher gear and the region is recovering from the Great Recession and the ensuing crisis over high debt that pushed some eurozone countries, notably Greece, to the brink of bankruptcy. Furthermore, near- to medium-term inflation expectations priced into bond markets put inflation below 1 percent, to say nothing of approaching the ECB's target of just-below 2 percent.

Investors are also keeping an eye on the outcome of the United Kingdom general election, with opinion polls showing Theresa May's Conservative Party leading between 5 and 12 percentage points over the main opposition Labour Party, suggesting she would increase her majority. Unemployment is falling, but wages aren't picking up as many people take part-time or lower wage jobs.

"Growth is so good, core inflation is so low", Michael Krautzberger, BlackRock's London-based head of European fixed income, said on Bloomberg TV on Thursday. At the bank's last meeting in April, Draghi said risks were "tilted to the downside".

Though inflation in the eurozone is higher than it was for much of the past two years, that's largely because of a pick-up in oil prices.

Draghi made the statement as the central bank lowered its forecasts for inflation this year to 1.5 percent from 1.7 percent, and for next year to 1.3 percent from 1.6 percent.

On Thursday, the bank has kept its short-term benchmark rate that steers short-term rates at a record low of zero.

The mixed outlook was seen strengthening the case for keeping the ECB's easy policy in place, including a pledge to cut rates further, if necessary to bring inflation back to the central bank's target of just under 2%. It held Thursday's meeting in Tallinn, Estonia, one of the occasional meetings held away from the bank's Frankfurt headquarters to underline its identity as a multinational institution.

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