Investors are awaiting an interest rate hike by the ECB today. The central bank is expected to turn interest rates positive for the first time in 11 years with a 50-basis point hike, as it struggles to combat heightened inflation and a battered euro.

- The debate is over the size of the hike, with consensus moving towards an increase of 75 basis points, following the lead of the U.S. Federal Reserve, with the central bank seen as having limited time to try and wrest back control over record inflation before growth in the region stalls.

- Attention will be on comments from Federal Reserve Chair Jerome Powell at a Cato Institute conference later in the session, with Fed officials soon due to enter into a blackout period prior to the U.S. central bank's Sept. 20-21 meeting. Goldman Sachs now expects a 75 basis point hike this month, up from its previous forecast of 50 bps, saying Federal Reserve officials have been sounding hawkish recently.

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Equities:

- In Wall Street, US shares surged on Wednesday. The shares are trying to abandon three-week slide as rates and oil prices eased, cooling investor concerns about continued high inflation.

- All major S&P 500 sectors rose on the day apart from energy, which fell 1.2% with the slide in oil prices.

- The Nasdaq Composite added 242.4 points or 2.02%, to 12,255.2, the S&P 500 gained 71.68 points or 1.83%, to 3,979.88 and The Dow Jones Industrial Average rose 420 points or 1.35%, to 31,576.

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Currency Market:

The U.S. dollar edged lower in early European trade Thursday, with the euro rebounding ahead of the latest European Central Bank rate decision, which is expected to result in another aggressive increase.

The Dollar Index traded 0.2% lower to 109.630, retreating from Wednesday’s peak of 110.79, a level not seen since June 2002.

EUR/USD traded largely unchanged at 0.9996. GBP/USD fell 0.2% to 1.1505, heading back toward the previous day's 37-year low of 1.1405, while AUD/USD fell 0.2% to 0.6754 after RBA Governor Philip Lowe hinted at a slower pace of increase in interest rates going forward.

USD/JPY traded largely unchanged at 143.69, after reaching a 24-year high of 145.00 in the previous session.

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Commodities: Gold

Gold prices steadied above $1,700 as a pause in the recent dollar rally took some pressure off bullion prices, with focus turning to an upcoming European Central Bank meeting for more cues.

Spot gold was largely unchanged around $1,717.40 after surging nearly 1% on Wednesday. Gold futures rose slightly to $1,728.65 and had also jumped nearly 1% in the prior session.

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Commodities: Oil

Oil prices rose by as much as $1 per barrel after dropping below key technical support levels in the previous session, as an energy standoff between Europe and Russia focused investor minds on how tight fuel supply may become.

Brent crude futures gained 0.7% to $88.63 per barrel. WTI futures were up 0.9% at $82.64 per barrel.

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