The European Central Bank (ECB) announced a continuation of the bank's generous asset-buying program on Thursday, although a reduced pace of purchases is set to start from April next year.
Current asset purchases of 80 billion euros ($86 billion) a month were due to end in March 2017, but will now be extended until at least December 2017 and will be cut to 60 billion euros a month from April 2017, the bank said in a statement. Benchmark interest rates were left unchanged.
Bonds with maturity between 1 and 2 years will now be included in the asset buys and the bank will also purchase bonds yielding less than its -0.4 percent deposit rate, if necessary.
President Mario Draghi also outlined the bank's inflation forecasts over the next three years with ECB members keeping their estimate for consumer prices to grow this year by 0.2 percent. Members now expect inflation at 1.3 percent next year, marginally higher than a previous forecast for 1.2 percent back in September. 2018 inflation was revised slightly lower.
Euro zone economic growth is shrugging off Britain's decision to leave the European Union, and Germany, the bloc's growth engine, seems to be picking up speed again.
Oil rebounded from the week's lows to close above $50 a barrel on Thursday as market watchers focused on an upcoming weekend meeting between OPEC and non-OPEC producers that may result in an agreement to cut crude output further.
North Sea Brent crude was up 94 cents, or 1.8 percent, at $53.94 a barrel by 2:35 p.m. ET (1935 GMT). U.S. light crude was up $1.07, or 2.2 percent, at $50.84 a barrel.
Both benchmarks have fallen more than $2 a barrel from highs reached on Monday when investors bought heavily in the wake of the OPEC deal.
OPEC will meet non-OPEC countries to finalise a global oil limiting pact on Dec. 10 in Vienna, two sources told Reuters on Saturday.
OPEC agreed this week to reduce output by around 1.2 million barrels per day (bpd) beginning in January in a bid to reduce global oversupply and prop up prices.
It hopes non-OPEC countries will contribute another 600,000 bpd to the cut. Russia has said it will reduce output by around 300,000 bpd.
Reference: Reuters, CNBC
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