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European Markets Inch Higher In Cautious Trade

The majority of the European markets ended Thursday's session with modest gains. However, after being stuck in a sideways pattern throughout the day, the markets finished little changed overall.

Traders were in a cautious mood as they continue to monitor the developments in Spain, following Catalonia's independence vote. Investors are also awaiting the release of the U.S. jobs report for September on Friday.

The European Central Bank policymakers debated the possibility of scaling back the massive stimulus, given the stronger economy, as well as the trade-offs between various scenarios about the pace and duration of asset purchases, during the policy session in September.

"Members had a very preliminary exchange of views about the future monetary policy stance and the considerations that might guide a recalibration of instruments and the transmission channels through which they shape financial conditions and the outlook for price stability," the minutes, which the ECB calls "the accounts", of the September 6-7 Governing Council meeting said.

While there was broad agreement among policymakers that there was still the need for substantial monetary policy support to return inflation to 'below, but close to 2 percent', they were more confident that the price growth target would be achieved given the dissipation of deflationary risks and a stronger economy.

"A view was put forward that conditions were increasingly falling into place that would allow the intensity of monetary policy accommodation to be adapted and would provide an opportunity to scale back the Eurosystem's net asset purchases," the minutes said.

The pan-European Stoxx Europe 600 index advanced 0.09 percent. The Euro Stoxx 50 index of eurozone blue chip stocks increased 0.52 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.14 percent.

The DAX of Germany dropped 0.02 percent, but the CAC 40 of France rose 0.30 percent. The FTSE 100 of the U.K. gained 0.54 percent, but the SMI of Switzerland finished lower by 0.23 percent.

In Frankfurt, Siemens shed 1.32 percent after it concluded the sale of its remaining 17 percent stake in Osram Licht. Osram shares fell 4.53 percent.

In Paris, AccorHotels edged up 0.87 percent after it agreed to acquire a 50 percent stake in Orient Express owned by the SNCF Group.

In London, theme park operator Merlin Entertainments jumped 3.43 percent on a Bloomberg report that it approached SeaWorld about a possible acquisition.

Furniture retailer DFS fell 4.22 percent after it reported a 22.3 percent fall in pre-tax profits in the year to July 29.

Miners turned in a solid performance as LME base metals prices held steady near multi-year highs. Antofagasta climbed 2.36 percent, Anglo American gained 2.76 percent and Glencore added 3.03 percent.

Germany's construction sector growth softened in September, data from IHS Markit showed Thursday. The headline Purchasing Managers' Index dropped to 53.4 in September from 54.9 in August.

Greece's unemployment rate dropped slightly in July but remained at an elevated level, data from the Hellenic Statistical Authority showed Thursday. The jobless rate fell to a seasonally adjusted 21.0 percent in July from revised 21.3 percent in June. This was the seventh consecutive fall in the rate.

With the more closely watched monthly jobs report looming, the Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended September 30th.

The report said initial jobless claims dropped to 260,000, a decrease of 12,000 from the previous week's unrevised level of 272,000. Economists had expected jobless claims to edge down to 265,000.

With exports rising and imports falling, the Commerce Department released a report on Thursday showing that the U.S. trade deficit narrowed by more than anticipated in the month of August. The Commerce Department said the trade deficit narrowed to $42.4 billion in August from a revised $43.6 billion in July.

Economists had expected the trade deficit to narrow to $42.7 billion from the $43.7 billion originally reported for the previous month.

New orders for U.S. manufactured goods rebounded by slightly more than anticipated in the month of August, according to a report released by the Commerce Department on Thursday. The report said factory orders jumped by 1.2 percent to $471.7 billion in August after tumbling by 3.3 percent to $466.2 billion in July. Economists had expected factory orders to climb by 1.0 percent.

by RTT Staff Writer

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