ECB's meeting leads to boost for European equities

Heading into the close the FTSE 100 is 35 points higher, while the mid-cap FTSE 250 has soared by 200 points. 

European markets have been cheered by the continued dovish stance of the ECB and their decision to ‘significantly’ increase the pace of bond purchases for the second quarter. This has, unsurprisingly, put pressure on the euro, which has edged back against the US dollar, but overall the continued support for the eurozone economy has bolstered investor enthusiasm for eurozone assets. It would be nice to have a full-blown fiscal stimulus effort to go with it, but investors must be content with a supportive ECB for the time being. The positive atmosphere has flowed over to the FTSE 350, with UK mid-caps enjoying a particularly good day on expectations that a rebounding eurozone economy will lift UK small and medium-size firms thanks to a solid recovery in demand. 

The losses of earlier in the week appear to be a distant memory, particularly in the US, where indices have been busily clawing back the ground ceded on Monday and Tuesday. Earnings season appears to be providing sufficient good news to keep indices at their elevated levels, with few unpleasant surprises thus far. 2021 continues to surprise in its lack of volatility, marking a sharp contrast to the madness of 2020. US unemployment claims are on the right path, and existing home sales are holding steady too, providing a solid economic backdrop for ebullient stock markets.