European Markets Climbed After ECB Held Steady

(RTTNews) - The majority of the European markets ended Wednesday's session in positive territory. However, the markets pared their gains in late trade due to a sell-off in European bonds. The bond sell-off drove the yield on German Bunds sharply higher, adding to yesterday's sharp move. The European Central Bank made no changes to interest rates upon the conclusion of its meeting today. The situation in Greece remains in focus as debt negotiations continue.

Greek Prime Minister Alexis Tsipras is set to meet European Commission President Jean-Claude Juncker on Wednesday in Brussels and will be presented with what is dubbed "the final offer" from creditors - the European Union, the European Central Bank and the International Monetary Fund.

The Greek government, meanwhile, claimed that Tsipras will be discussing its own plan in Brussels, which was sent to creditors on Monday.

The European Central Bank on Wednesday left its key interest rates unchanged at a record low for a seventh consecutive session amid expectations that Greece and creditors will reach a deal later in the day, providing some relief from days of uncertainty.

The Governing Council, led by ECB President Mario Draghi, held the refinancing rate at a record low 0.05 percent, following its meeting in Frankfurt, in line with economists' expectations.

The bank also held the deposit rate unchanged at -0.20 percent and the marginal lending rate at 0.30 percent. The three main interest rates were lowered by 10 basis points in September last year.

The European Central Bank's asset purchases are proceeding as planned and will continue until there is a sustained shift in the inflation path, ECB President Mario Draghi said Wednesday. He also reaffirmed the bank's view that Greece should remain in the euro area, as crucial talks between the country's government and creditors are due to take place in Brussels later in the day.

"The asset purchase programmes are proceeding well," Draghi said in the introductory statement during his customary post-decision press conference in Frankfurt.

"Our asset purchases of EUR 60 billion per month are intended to run until the end of September 2016 and, in any case, until we see a sustained adjustment in the path of inflation."

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.62 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.18 percent.

The DAX of Germany climbed by 0.80 percent and the CAC 40 of France rose by 0.59 percent. The FTSE of the U.K. gained 0.32 percent and the SMI of Switzerland finished higher by 0.53 percent.

In Frankfurt, Commerzbank increased by 1.73 percent and Detusche Bank added 1.30 percent.

RWE climbed by 1.56 percent and E.ON gained 1.27 percent.

Fresenius Medical Care advanced by 2.15 percent and Fresenius finished up by 0.32 percent.

In Paris, EDF declined by 3.07 percent, amid speculation that the electric utility might withdraw from a 25 billion pounds project in Somerset, if Britain left the European Union.

BNP Paribas gained 2.23 percent and Societe Generale added 1.30 percent.

In London, BHP Billiton dropped by 1.19 percent, after the mining giant's chief executive officer warned that oversupply would keep metal prices in check for some time.

CRH gained 3.40 percent. J. Sainsbury climbed by 1.92 percent and WM Morrison Supermarkets added 3.25 percent.

Supermarket chain Ahold climbed by 5.87 percent in Amsterdam and Delhaize jumped by 7.41 percent in Brussels, amid reports of progress in merger talks between the two companies.

Amadeus IT Holding, an operator of travel booking systems, sank by 9.73 percent in Madrid. Deutsche Lufthansa announced that from September 1, it would include a surcharge of 16 euros for every ticket issued by a booking channel using global distribution systems.

Eurozone retail sales recovered at a faster than expected pace in April, Eurostat reported Wednesday. The volume of retail sales increased 0.7 percent month-on-month in April reversing a 0.6 percent fall in March. Sales were expected to grow by 0.6 percent.

The euro area jobless rate dropped as expected to the lowest level in more than three years in April, data from Eurostat revealed Wednesday. The unemployment rate came in at 11.1 percent in April compared to revised 11.2 percent in March. This was the lowest rate since February 2012, when it was 10.9 percent. The rate came in line with expectations.

Eurozone private sector growth slowed less than estimated in May, final data from Markit showed Wednesday. The final composite output index fell to 53.6 in May from 53.9 in April. But it was above the flash score of 53.4.

Germany's private sector grew at the weakest pace in five months in May, final data from Markit Economics showed Wednesday. The final composite output index dropped to 52.6 in May from 54.1 in April. It was also below the flash reading of 52.8.

The French private sector activity expanded at the fastest pace in three months in May as service growth improved amid slower decline in manufacturing output. The final composite output index rose to 52 in May from 50.6 in April, data from Markit showed Wednesday. Initially, it was estimated to rise to 51.

British services sector expanded at the weakest pace in five months in May, as growth rates for output and new business worsened, survey results from Markit Economics revealed Wednesday. The seasonally adjusted Markit/CIPS UK Services Purchasing Managers' Index for the services sector, fell to 56.5 in May from 59.5 in April.

Shop prices in the United Kingdom were down 1.9 percent on year in May, the British Retail Consortium said on Wednesday. That was unchanged from the rate of decline in the previous month, although it missed forecasts for a decline of 1.8 percent.

U.K. house prices increased at the slowest pace in 21 months in May, data from the Nationwide Building Society showed Wednesday. House prices increased 4.6 percent year-on-year in May, slower than the 5.2 percent growth seen in April. This was the slowest growth since August 2013 when prices increased 3.5 percent and also weaker than the expected 4.9 percent increase.

After reporting slowing private sector job growth over the past several months, payroll processor ADP released a report on Wednesday showing that the pace of job growth re-accelerated in the month of May. ADP said the private sector added 201,000 jobs in May following a downwardly revised increase of 165,000 jobs in April.

Economists had expected an increase of about 200,000 jobs compared to the addition of 169,000 jobs originally reported for the previous month.

Reflecting a notable pullback in the value of imports, the Commerce Department released a report on Wednesday showing that the U.S. trade deficit narrowed by more than expected in the month of April.

The report said the trade deficit narrowed to $40.9 billion in April from a revised $50.6 billion in March. Economists had expected the deficit to drop to $44.0 billion from the $51.4 billion originally reported for the previous month.

While the Institute for Supply Management released a report on Wednesday showing continued growth in U.S. service sector activity in the month of May, the pace of growth in the sector slowed by much more than economists had anticipated.

The ISM said its non-manufacturing index dropped to 55.7 in May after climbing to a five-month high of 57.8 in April. Economists had expected the index to show a much more modest drop to a reading of 57.2.