Euro nudges lower after ECB holds steady, stocks inch up

The euro and ​euro zone bond yields inched ‌lower, and ​European stocks edged higher on Thursday, after the European Central Bank held interest rates ‌steady, as expected.

However, the central bank warned inflation risks were on the rise from surging energy costs, which may solidify market bets for a December ‌rate hike. Market focus will now shift to a press conference ‌by leaders of the central bank due at 1345 GMT, for clues about the outlook for interest rates.

President Christine Lagarde herself will also be in focus. Earlier ⁠in the ​day, she ⁠announced that she will step down on February 7, ahead of schedule. The euro was ⁠last down 0.4% at $1.1107, extending an earlier fall that took it to ​its lowest since May last year. It dropped to its lowest ⁠in 18 months on the pound just before the rate decision, and was last ⁠at ​83.48 pence.

Germany's 10-year bond yield, which serves as the euro zone benchmark, was last down 4 basis points at 3.34%, while ⁠the yield on the rate-sensitive Schatz was down 5 bps at 3.049%, ⁠each a ⁠whisker lower than before the decision. European stocks rose slightly after the decision. The broad STOXX 600 was ‌up 1%