European stocks retreated, posting the biggest two-day slump in more than four months, as European Central Bank President Mario Draghi said that the economic recovery in the euro area remains subject to downside risks.

Draghi said that risks remain to the euro area’s economic recovery in the second half of this year.

“Weak economic activity has extended into the early part of the year and a gradual recovery is projected for the second half of this year, subject to downside risks,” the ECB’s president said at a press conference in Frankfurt. The central bank left its benchmark interest rate at a record low of 0.75 percent today, matching estimates from 54 of 56 economists in a Bloomberg survey. Two had predicted a cut to 0.5 percent.

In the U.K., the Bank of England’s Monetary Policy Committee held its key rate at a record low of 0.5 percent and maintained bond purchases at 375 billion pounds ($570 billion). Today’s meeting was the first since Chancellor of the Exchequer George Osborne gave the bank more flexibility over how long it takes to meet its 2 percent inflation target. The median estimates in surveys of economists had predicted no change for either policy.

National benchmark indexes declined in 16 of the 18 western-European markets. Germany’s DAX dropped 0.7 percent and France’s CAC 40 lost 0.8 percent. The U.K.’s FTSE 100 Index retreated 1.2 percent.

Banca Generali sank 5.1 percent to 13.85 euros for its longest streak of losses in more than five years. Assicurazioni Generali sold 12 percent of the Trieste, Italy-based private bank for 185 million euros. Italy’s biggest insurer holds a 51.5 percent controlling stake following the transaction.

EADS declined 2.7 percent to 39.25 euros after a term sheet obtained by Bloomberg News showed that Stichting Administratiekantoor Spanish EADS Shares Warehousing Foundation is selling 9.6 million shares in the aerospace company. Two people familiar with the transaction said that the shares were priced at 39.75 euros apiece.

Huhtamaki Oyj fell 2 percent to 15.25 euros. The packaging company said the Finnish Cultural Foundation, a shareholder, sold as many as 2.79 million shares, reducing its stake in the business to less than 15 percent.

BTG rose 1 percent to 362.1 pence. The drugmaker forecast revenue of 230 million pounds in 2013, compared with an earlier prediction of 205 million pounds to 215 million pounds.

Crude fell for a second day as more Americans than projected filed applications for unemployment benefits and European Central Bank President Mario Draghi said risks remain to the region’s economy.

Prices dropped as much as 1.8 percent as jobless claims rose to the highest level since Nov. 24 in a Labor Department report. U.S. jobless claims rose by 28,000 in the week ended March 30 to 385,000, the Labor Department said today in Washington. The median forecast was 353,000 in a survey. The four- week average of claims increased to 354,250 from 343,000.

Weak economic activity has been evident in the early part of this year, Draghi said at a press conference in Frankfurt after the ECB kept its benchmark interest rate at a record low of 0.75 percent.

WTI oil for May delivery fell to $92.34 a barrel on the New York Mercantile Exchange. It closed at $94.45 yesterday, the lowest settlement since March 22.

Brent crude for May settlement declined 88 cents, or 0.8 percent, to $106.23 a barrel on the London-based ICE Futures Europe exchange. 

EUR/USD $1.2700, $1.2800, $1.2825, $1.2980

USD/JPY Y93.00, Y94.00, Y94.25, Y94.30, Y94.50, Y95.00, Y95.40, Y95.80, Y96.00

EUR/JPY Y121.35

GBP/USD $1.5100, $1.5200

EUR/GBP stg0.8450

EUR/NOK Nok7.4465

AUD/USD $1.0375, $1.0400, $1.0410, $1.0450, $1.0455, $1.0475, $1.0500

USD/CAD C$1.0125

U.S. stock fell slightly as government data showed more Americans than projected filed applications for unemployment benefits last week.

Global Stocks:

Nikkei  12,634.54 +272.34 +2.20%

Hang Seng 22,337.49 -30.33 -0.14%

FTSE  6,389.01 -31.27 -0.49%

CAC  3,783.81 +28.85 +0.77%

DAX  7,912.52 +37.77 +0.48%

Crude oil $93.91 -0.57%

Gold $1548.00 -0.35%

Downgrades:

Microsoft (MSFT) downgraded to Neutral from Buy at BofA/Merrill

Other:

Apple (AAPL) initiated with a Buy at Lazard Capital

Data

00:00 China Bank holiday April

00:30 Australia Building Permits, m/m February -2.0% +2.4% 3.1%

00:30 Australia Building Permits, y/y February +12.8% +14.3% +10%

00:30 Australia Retail sales (MoM) February +1.2% +0.3% +1.3%

00:30 Australia Retail Sales Y/Y February +3.0% +4.6%

03:00 Japan BoJ Interest Rate Decision April 0.10% 0.10% 0.10%

03:00 Japan BoJ Monetary Policy Statement April

07:00 Japan BOJ Press Conference April

07:50 France Services PMI (Finally) March 41.9 41.9 41.3

07:55 Germany Services PMI (Finally) March 51.6 51.6 50.9

08:00 Eurozone Services PMI (Finally) March 46.5 46.5 46.4

08:30 United Kingdom Purchasing Manager Index Services March 51.8 51.4 52.4

09:00 Eurozone Producer Price Index, MoM February +0.6% +0.2% +0.2%

09:00 Eurozone Producer Price Index (YoY) February +1.9% +1.4% +1.3%

11:00 United Kingdom BoE Interest Rate Decision April 0.50% 0.50% 0.50%

11:00 United Kingdom Asset Purchase Facility April 375 375 375

11:00 United Kingdom MPC Rate Statement April

11:45 Eurozone ECB Interest Rate Decision April 0.75% 0.75%

European currency fell against the dollar as a published report showed that the decline in activity in the private sector of the euro area has increased in March, while in Germany the value of this index almost reached the level of stagnation, as a result many economists were of the view that the euro zone to be on his way to his sixth quarterly decline. According to the report, the final composite purchasing managers' index, which measures the performance of the service sector and in the manufacturing sector fell last month to the level of 46.5, compared to 47.9 in February. At the same time, the data showed that the purchasing managers' index for the services sector dropped to a mark of 46.4 from 47.9 the previous month, which was also slightly below the pre-assessment at the level of 46.5. Meanwhile, another report showed that producer price inflation in the euro area slowed in February, exceeding economists' forecasts for this. According to the report, annualized producer price index increased in February by 1.3%, which was significantly less than the previous month, which was revised up to 1.7%. Add that many economists predicted slowing inflation to 1.4% from 1.9%, which was originally reported in January. In addition, it was reported that in monthly terms producer price index rose by 0.2%, which is fully in line with economists' forecasts. However, the monthly growth was much slower than the 0.4% recorded in January, which was revised down from 0.6%. But in spite of such a significant decline, the euro was able to recover some ground after the ECB said that the interest rate remains unchanged.

The cost of the British pound against the dollar has increased significantly, restored with almost all the losses that have been incurred in the first half of the session. Note that the strong currency contributed data, which showed that activity in the services sector has grown considerably in the UK last month, showing with the fastest rate of expansion in the last seven months. According to the report, the seasonally adjusted Purchasing Managers' Index (PMI) for the services sector rose in March to the level of 52.4, up from 51.8 in February. Note that according to the average forecast of experts, the value of this index was to rise to 51.4. Note that the index reading above 50 indicates expansion, while a drop below suggests decline. In addition, it was reported that the number of new orders also rose, registering with the largest increase in the last ten months, which was associated with an increase in the confidence of consumers and the willingness to take on more new business. Meanwhile, data showed that the company increased the number of its labor force, which was the third month in a row addition, partly because of expectations of a further increase in sales in the coming months.

We add that the growth rates also contributed to the decision of the Bank of England and the ECB leave key interest rates level unchanged at 0.5% and 0.75% respectively.

The Japanese currency fell sharply against all major currencies after the Bank of Japan announced its decision to keep the benchmark interest rate unchanged at 0-0.1% and extend the program to repurchase assets from the market by 50 trillion yen - up to 151 trillion yen in year (1.62 trillion dollars). In addition, the regulator intends to start buying government bonds with maturities greater than the limit of three years. Now the limit is extended to seven years. The Bank of Japan called the new scheme easing "quantitative and qualitative monetary easing." Central Bank announced its intention to achieve the inflation target of about 2% in two years. The decision was taken by majority vote, 8 to 1. Made against Kiuti, who did not agree with the decision to accept a scheme of quantitative and qualitative easing. It is worth noting that today's meeting was the first for new head finregulyatora Kuroda, who took office last month.

The Australian dollar rose against the U.S. dollar, registering the fifth consecutive daily gain after positive macroeconomic statistics. In February 2013, the turnover in the Australian retail sector rose by 0.4%, after rising 0.3% in January. By February 2012, retail trade turnover in February increased by 3.2%. With seasonal correction in January retail sales rose by 1.3%, after rising 1.2% in January and a decline of 0.5% in December 2012 to positively influence the growth of the Australian currency report on the number of building permits, which , according to the seasonal correction in February rose 3.1% after declining in the previous two months.

EUR / USD: during the European session the pair fell to $ 1.2782, and then rose to $ 1.2824

GBP / USD: during the European session the pair fell to $ 1.5023, but later was able to rise to $ 1.5132

USD / JPY: during the European session, rose to Y95.68

At 12:30 GMT the euro area will be the monthly press conference of the ECB. Also during this time, the U.S. will report on the number of initial claims for unemployment benefits in March. At 12:45 GMT the U.S. with an address by a member of the Federal Open Market C. Evans. At 14:30 GMT by an address by Fed Chairman Bernanke. At 16:30 GMT the U.S. member of the Committee on the Federal Open Market Easter George. 21:00 GMT In an address by a member of the Federal Open Market J. Yellen.

EUR/USD

Offers $1.2900/10, $1.2880/90, $1.2855/65

Bids $1.2780/70, $1.2755/50, $1.2735/30, $1.2720, $1.2705/690

GBP/USD

Offers $1.5280, $1.5215/20, $1.5195/2.00, $1.5175/80, $1.5095/00

Bids $1.5034, $1.5020, $1.5000

AUD/USD

Offers $1.0550, $1.0475/80, $1.0445/50

Bids  $1.0405/00, $1.0390/85, $1.0380, $1.0365/60, $1.0355/50

EUR/GBP

Offers stg0.8600/05, stg0.8560/65, stg0.8545/50, stg0.8520/25

Bids stg0.8480/75, stg0.8465/60, stg0.8450/45, stg0.8410/00, stg0.8395/90

EUR/JPY

Offers Y124.00, Y123.50, Y123.00, Y122.80

Bids Y121.60/50, Y121.00, Y120.50, Y120.20

USD/JPY

Offers Y96.50, Y96.00, Y95.80

Bids Y95.00, Y94.65/60, Y94.50, Y94.00, Y93.50

European stocks were little changed, following yesterday’s biggest drop in five weeks, as investors awaited an update on monetary policy from European Central Bank President Mario Draghi. U.S. index futures advanced, while Asian shares retreated.

The Stoxx Europe 600 Index (SXXP) slipped 0.1 percent to 294.39 at 9:12 a.m. in London, paring a drop of as much as 0.3 percent.

Banca Generali retreated 5.8 percent to 13.75 euros. The Italian insurer offered a 12 percent stake for sale. Generali will retain control of the bank after the transaction.

EADS (EAD) lost 1.4 percent to 39.78 euros after a term sheet obtained by Bloomberg News showed that Stichting Administratiekantoor Spanish EADS Shares Warehousing Foundation is selling 9.6 million shares in the maker of Airbus airplanes. Two people familiar with the transaction said that the shares priced at 39.75 euros apiece.

Huhtamaki Oyj declined 2.6 percent to 15.16 euros. Shareholder (HUH1V) SKR is selling as many as 2.79 million shares in the packaging company in a so-called accelerated bookbuild.

BTG rose 4.3 percent to 374.1 pence. The drugmaker forecast revenue of 230 million pounds in 2013, compared with an earlier prediction of 205 million pounds to 215 million pounds.

Telefonica SA added 1.3 percent to 10.49 euros. People with knowledge of the matter said Europe’s most indebted telephone company has considered selling assets such as its Irish and Czech divisions.

To date:

FTSE 100 6,414.59 -5.69 -0.09%

CAC 40 3,783.75 +28.79 +0.77%

DAX 7,908.04 +33.29 +0.42%

EUR/USD $1.2700, $1.2800, $1.2825, $1.2980

USD/JPY Y93.00, Y94.00, Y94.25, Y94.30, Y94.50, Y95.00, Y95.40, Y95.80, Y96.00

EUR/JPY Y121.35

GBP/USD $1.5100, $1.5200

EUR/GBP stg0.8450

EUR/NOK Nok7.4465

AUD/USD $1.0375, $1.0400, $1.0410, $1.0450, $1.0455, $1.0475, $1.0500

Asian stocks pared declines, with Japanese shares reversing losses, after the Bank of Japan expanded its stimulus program in its first policy decision under new governor Haruhiko Kuroda.

Nikkei 225 12,634.54 +272.34 +2.20%

Hang Seng Closed

S&P/ASX 200 4,913.5 -44.18 -0.89%

Shanghai Composite Closed

Toyota Motor Corp., the world’s largest carmaker, advanced 2.8 percent, reversing an earlier drop, as the yen weakened against the dollar and Japanese government bonds rose.

Mitsubishi Estate Co surged 7.2 percent in Tokyo, leading gains among property firms.

00:00 China Bank holiday April

00:30 Australia Building Permits, m/m February -2.0% +2.4% 3.1%

00:30 Australia Building Permits, y/y February +12.8% +14.3% +10%

00:30 Australia Retail sales (MoM) February +1.2% +0.3% +1.3%

00:30 Australia Retail Sales Y/Y February +3.0% +4.6%

03:00 Japan BoJ Interest Rate Decision April 0.10% 0.10% 0.10%

03:00 Japan BoJ Monetary Policy Statement April

The yen fell versus all of its 16 major counterparts after the Bank of Japan announced larger- than-expected monthly bond purchases at the conclusion of a two- day meeting today. Japan’s currency slid against the euro and the dollar as BOJ Governor Haruhiko Kuroda and his peers adopted a two-year time horizon to achieve their 2 percent annual inflation goal. Today’s meeting was the first to be led by Kuroda since he took office last month. Japan’s central bank said it will buy 7 trillion yen ($74.3 billion) of bonds a month, exceeding the median 5.2 trillion yen predicted by economists surveyed by Bloomberg News before today’s decision.

Australia’s dollar gained for a fifth day as traders pared bets on interest-rate cuts after retail sales climbed by the most in more than three years. The so-called Aussie traded 0.2 percent from the strongest level in 10 weeks versus the U.S. currency as retail sales jumped 1.3 percent in February and building approvals rebounded.  Building approvals rebounded 3.1 percent in February from a revised 2.0 percent drop in January. A gauge of Australia’s services industry advanced to the highest level in 14 months.

EUR / USD: during the Asian session the pair was trading around $ 1.2840.

GBP / USD: during the Asian session, the pair traded in the range of $ 1.5125-45.

USD / JPY: during the Asian session, the pair rose above Y94.00.

Thursday's calendar sees a full schedule of releases and events on both sides of the Atlantic, with the lunch time policy announcements from the ECB and BOE set to dominate. Ahead of that, the other central bank event of the day sees the inaugural press conference from new BOJ Governor Haruhiko Kuroda, expected at 0630GMT. Kuroda will explain to the assembled press the BOJ's latest decision. The main EMU releases see the March services PMIs, starting at 0713GMT

with the release of the Spanish data. This is followed by the Italian data at 0743GMT, France at 0748GMT, Germany at 0753GMT and the Eurozone at 0758GMT. Further EMU data is expected from 0900GMT, with the release of the Eurozone

Change % Change Last

GOLD 1,557.60 -18.30 -1.16%

OIL 94.45 -2.74 -2.82%

Change % Change Last

Nikkei 225 12,362.2 +358.77 +2.99%

S&P/ASX 200 4,957.7 -27.81 -0.56%

Shanghai Composite 2,225.47 -2.27 -0.10%

FTSE 100 6,420.28 -70.38 -1.08%

CAC 40 3,754.96 -50.41 -1.32%

DAX 7,874.75 -69.12 -0.87%

DJIA 14,550.30 -111.66 -0.76%

S&P 500 1,553.69 -16.56 -1.05%

NASDAQ 3,218.60 -36.26 -1.11%

(pare/closed(00:00 GMT +02:00)/change, %)

EUR/USD $1,2843 +0,16%

GBP/USD $1,5131 +0,19%

USD/CHF Chf0,9452 -0,35%

USD/JPY Y93,07 -0,31%

EUR/JPY Y119,53 -0,15%

GBP/JPY Y140,83 -0,13%

AUD/USD $1,0457 +0,04%

NZD/USD $0,8416 0,00%

00:00 China Bank holiday April

00:30 Australia Building Permits, m/m February -2.0% +2.4% 3.1%

00:30 Australia Building Permits, y/y February +12.8% +14.3% +10%

00:30 Australia Retail sales (MoM) February +1.2% +0.3% +1.3%

00:30 Australia Retail Sales Y/Y February +3.0%

03:00 Japan BoJ Interest Rate Decision April 0.10% 0.10%

03:00 Japan BoJ Monetary Policy Statement April

07:00 United Kingdom Halifax house price index March +0.5% +0.2%

07:00 United Kingdom Halifax house price index 3m Y/Y March +1.9% +1.1%

07:00 Japan BOJ Press Conference April

07:50 France Services PMI (Finally) March 41.9 41.9

07:55 Germany Services PMI (Finally) March 51.6 51.6

08:00 Eurozone Services PMI (Finally) March 46.5 46.5

08:30 United Kingdom Purchasing Manager Index Services March 51.8 51.4

09:00 Eurozone Producer Price Index, MoM February +0.6% +0.2%

09:00 Eurozone Producer Price Index (YoY) February +1.9% +1.4%

11:00 United Kingdom BoE Interest Rate Decision April 0.50% 0.50%

11:00 United Kingdom Asset Purchase Facility April 375 375

11:00 United Kingdom MPC Rate Statement April

11:45 Eurozone ECB Interest Rate Decision April 0.75% 0.75%

12:30 Eurozone ECB Press Conference April

12:30 U.S. Initial Jobless Claims March 357 354

12:45 U.S. FOMC Member Charles Evans Speaks April

14:30 U.S. Fed Chairman Bernanke Speaks April

16:30 U.S. FOMC Member Esther George Speaks April