European Markets Hold Steady as Investors Await ECB Guidance

European equities moved slightly higher on Thursday, with trading activity subdued as investors awaited the European Central Bank’s policy decision. The pan-European STOXX 600 index edged up, reflecting cautious optimism across most sectors.

Markets broadly expect the ECB to keep interest rates unchanged at this meeting, leaving the spotlight on President Christine Lagarde’s press conference for signals on the outlook. Investors are watching closely for any hints on whether monetary easing could be introduced later in 2025, as the eurozone continues to struggle with sluggish growth and softening inflation.

Financial stocks provided modest support to the market, while defensive sectors traded flat. In government debt markets, eurozone bond yields steadied following recent volatility, underscoring a wait-and-see approach until clearer policy direction is provided.

The outcome of the ECB meeting comes at a time when global central banks, including the U.S. Federal Reserve, are preparing for potential shifts in policy. For Europe, Lagarde’s message will be key in shaping expectations on whether monetary support will arrive in the months ahead.