Investors avoid big moves as key events draw near

London - Financial markets were mostly steady as investors avoided adding big positions ahead of key events in Europe and the US Oil recovered from the steepest decline in more than a year on Wednesday, while UK government bonds led the region’s debt lower as the nation goes to vote in a general election.

European stocks rose while US futures edged higher before the ECB’s policy decision, the UK election and former FBI Director James Comey’s testimony before a Senate committee.

Copper led industrial metals higher as data showed an acceleration in Chinese exports while oil recouped a small portion of the more than 5% plunge triggered by a report showing a rise in US crude stockpiles.

A pivotal day for capital markets on Thursday comes as renowned bond investor Bill Gross said levels of risk in markets are at the highest since before the 2008 financial crisis.

Equity investors have been prepared to place their faith in an expanding global recovery, while fixed-income money managers have dialled back inflation expectations in the US.

"The day the market has been waiting for," Cole Akeson, a strategist at Sberbank CIB in Moscow, wrote in an emailed note. "The UK general election and the ECB meeting are today.

Both could have wide-ranging effects on markets in Europe and beyond."

Here are some of the key upcoming events:

The European Central Bank’s policy decision is followed by Mario Draghi’s address to reporters later in the day. Don’t expect policy changes, but the central bank may drop the reference to "downside" risks to growth, while reiterating a weak inflation outlook, Bloomberg Intelligence said.

Here’s a preview. Investors are awaiting results from the UK elections.

The polls close at 10pm on Thursday night in the US Comey released prepared testimony saying the president asked him to end an investigation into the former national security adviser.

Here are the main moves in markets:

Currencies

The Bloomberg Dollar Spot Index added 0.1% as of 9:57 in London. The pound was little changed at $1.2961 while the yen and euro weakened 0.1%.  

Stocks

The Stoxx Europe 600 Index rose 0.2%, led by miners and banks.  Futures on the S&P 500 added 0.1% after the underlying gauge added 0.2% on Wednesday.

Commodities

Oil recovered slightly from the biggest drop since February 2016 after a surprise expansion in US stockpiles. West Texas Intermediate crude added 0.7% to $46.05 a barrel. Gold dropped 0.1% to $1 285.23 an ounce.

Industrial metals climbed as China’s imports and exports expanded more than expected. Copper advanced 1% to $5 676.50 a metric ton while zinc gained 1.4% and nickel rose 0.7%.

Bonds

The yield on 10-year Treasuries rose two basis points to 2.19%. Benchmark UK gilt yields rose 3 basis points to 1.03%, the most in Europe. German bund yields added one basis point.