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 The bank is set to stick with record low interest rates and a policy
plan it laid out over the summer, but markets were watching for
signs that Draghi may temper his readiness for more aggressive
stimulus given reports of unease about his approach.
As ECB policymakers met in Frankfurt, the OECD warned that the euro
zone remained a stubborn weak spot in the global economy and called
on the ECB to live up to Draghi's promise "to do whatever it takes"
to preserve the currency union.
European shares were down 0.3 percent as a mixed batch of company
earnings gave investors an additional spur to cash in some of the 10
percent gains they have seen over the last few weeks.
In the currency market, the euro also pushed back above $1.25 as a
recent sharp rally in the dollar, particularly against the yen, came
to a halt after more volatile moves overnight.
But with markets having picked themselves up again after last
month's beating, and political hurdles like the U.S. mid-term
elections out of the way, there was a general feeling that the
upward trend in stocks and the dollar would continue.
"The market feels great," said Nick Lawson Managing Director in
Global Markets Equity at Deutsche Bank.
"It is a very risk-on mindset set at the moment and if you do get a
much more inclusive tone from the ECB and some information on what
assets could be bought, we could be off to the races."
The euro last traded at $1.2515, flirting once again with a two-year
low of $1.2439 set early in the week, while demand for euro zone
government bonds from Germany to Greece gradually picked up in light
pre-ECB trading.
Recent disappointing euro zone business surveys, a big cut in
European Commission growth forecasts and the Bank of Japan's
surprise decision last week to enhance its already massive monetary
stimulus have raised pressure on the ECB to ease more.
"The strategy of purchasing sovereign bonds is a challenge with the
structure and rules governing the ECB's approach. But if you are
going to say you need to do whatever it takes we need to think about
that," the OECD's new chief economist, Catherine Mann of the United
States, told Reuters after the publication of its forecasts.
COMMODITY ROUT
The Bank of England also meet on Thursday and left its record low
rates in place. There are signs the BoE is edging towards its first
post-crisis rate hike, but a slight loss of economic momentum in
recent weeks has cooled expectations it will move soon.
Wall Street, which ended at a record high on Wednesday following a
sweeping Republican party win in mid-term elections, was expected to
start around 0.1-0.2 percent lower.
Payroll processor ADP reported solid U.S. private-sector job growth
in October, auguring well for jobs data due on Friday and
unemployment claims data will add to the picture when its comes at
1330 GMT (8.30 a.m. EST).
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In Asian trading earlier, the region's shares and commodity
currencies had stumbled as the ongoing rout in oil, copper, gold,
silver and other key commodities trumped cautious optimism about the
strengthening U.S. economy.
Brent oil, which has plunged 30 percent since June, remained near a
four-year low at 82.70 a barrel. Copper, a barometer of global
demand, eased 0.3 percent to $6,618.25 per metric ton (1.1023 tons),
while gold and silver steadied after slumping at 4-1/2-year lows.
MSCI's broadest index of Asia-Pacific shares outside Japan fell as
much as 0.5 percent before largely recovering, led by declines in
Australia and China, and Tokyo ended down 0.9 percent as traders
booked profits from their 8-plus percent rise over the past three
days.
The Australian dollar, often used a liquid proxy for China, to which
it is heavily exposed, flirted with Wednesday's four-year low of
$0.8606 while the Canadian dollar stood near five-year lows of
C$1.1466 to the U.S. dollar.
Many other commodity exporters took an even bigger hit.
The Brazilian real remained within touching distance of a six-year
trough hit last week and Russia's rouble crashed to another record
low a day after the central bank effectively abandoned daily
inventions.
Reflecting the selloff, MSCI's emerging market index is now at its
cheapest level since 2005 in comparison to the U.S. S&P 500. Almost
30 percent of emerging markets are oil exporters and many others
depend on mining or other commodities.
"While I would put about a 70 percent chance that the global economy
will chug along, the fact that two of the BRICs bloc are facing
problems does raise some caution," said Soichiro Monji, chief
strategist at Daiwa SB Investments.
(Additional reporting by Hideyuki Sano in Tokyo; Editing by
Catherine Evans)
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