The European Central Bank cut interest rates as expected on Thursday. The decision was followed by an uptick in both global equity indices and bitcoin, further bolstered later on by higher-than-expected U.S. jobless claims.
"Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady," the ECB Governing Council said in a statement.Major European and UK equity indices were green on Thursday. In London, the FTSE 100 posted a 28.45-point increase to 8,275.40 in mid-day trading.
According to Bloomberg, the short-term 30-day correlation between bitcoin and the Nasdaq 100 Index of U.S. technology stocks is around the highest since early 2023, suggesting that further gains by equities could be accompanied by a move higher by bitcoin.The move by the ECB to cut rates comes after the Bank of Canada lowered its policy rate to 4.75% on Wednesday, having held it at 5% since July last year.
Canada was the first G7 country to loosen monetary policy in the current cycle, now followed by the ECB on Thursday.New claims for unemployment benefits in the U.S. increased last week, higher than the expectation of economists.
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