Thursday is likely to be dominated by economic news rather than corporate updates.
Analysts expect the European Central Bank (ECB) to cut its interest rate by between 10 and 20 basis points, fuelled by disappointing inflation data.
Craig Erlam at foreign exchange firm Oanda said: “As it stands, the market expects a 10-20 basis point cut to the deposit rate and €10-20bn increase in the bond buying programme."
A move at the lower end of this scale, he said, could disappoint investors, “especially given the ECB's history of over-delivering once the decision to ease has been made.”
Joshua Mahony at IG agreed, saying that with both core and headline inflation undershooting expectations, “it is clear that the eurozone is nowhere near escaping the disinflation trap it has been caught in over recent years.”
This provides Mario Draghi with further grounds for easing when he takes to the stand tomorrow, he added.
Investors will be keen to see if this analysis is accurate, and will likely focus on the severity of the cut, as well as whether further revisions will be probable in the future.
Significant announcements expected:
Final: GW Pharmaceuticals (LON:GWP), Elegant Hotels Group (LON:EHG), Impax Asset Management (LON:IPX)
Interim: DS Smith (LON:DS) (LON:SMDS), Imimobile (LON:IMO), Mercia Technologies (LON:MERC)
Companies trading ex-dividend: Royal Mail (LON:RMG), UK Mail Group (LON:UKM), Land Securities Group (LON:LAND), Bellway (LON:BWY), Debenhams (LON:DEB), JD Sports Fashion (LON:JD.)
Economic: UK – Official reserves; Eurozone – PMI Retail sales, ECB interest rate decision