The euro slid to a one-month low Thursday and stocks rebounded, driven by the persistent drumbeat of European Central Bank commentary suggesting further easing is ahead.
The common currency dropped to 1.3663 against the U.S. dollar after ECB Vice President Vitor Constancio reiterated the now-familiar line that the central bank is ready to take action if warranted, although he added that he sees "no distinct sign of deflation" in the euro area yet.
Citigroup said in a note to clients that Mr. Constancio's remarks "in reality offer nothing new." Still, the bank added that the drop in the euro appears to have triggered a so-called stop-loss run lower, where a drop in price triggers further sell orders. "Turnover is reasonable and our flow has a hefty 56% bias in favor of selling," the bank said, adding that selling is dominated by pension funds and insurers rather than more flighty hedge funds.
Recovering earlier losses, the Stoxx Europe 600 gained around 0.3% while the U.K.'sFTSE 100 rose 0.2%. Germany's DAX was up 0.3% and France's CAC-40 0.1% higher.
The economic news dominating the trading session comes from gross domestic product data releases from across Europe. In the three months to March, Germany's gross domestic product rose by 0.8% on the last three months of 2013. That represents the most rapid expansion since the first quarter of 2011. The French economy, by contrast, failed to grow on a quarter-on-quarter basis, after expanding just 0.2% in the final quarter of last year. The Dutch data made for grim reading, with the country posting a contraction of 1.4% on the quarter.
The figure for the whole euro zone is due to be published at 0900GMT.
"We expect the euro zone to have registered a fourth consecutive quarter of expansion in first quarter, with the pace expected to have picked up slightly to 0.3% from 0.2% in the fourth quarter of 2013," HSBC strategists wrote in a note.
They added that in addition to Germany and France producing divergent figures, they expect Italy to have registered "another quarter of very meager expansion."
Hungary posted its most rapid quarterly expansion since 2006, with the economy expanding by 3.5% on the year.
In commodities markets, gold fell 0.25% to $1,302.00 an ounce, while Brent crude oil lost 0.3% to trade at $109.00 a barrel.
