Eurozone blue-chip shares touch 15-year high on ECB’s pause hopes

Eurozone blue-chip shares rallied to their highest in more than 15 years on Thursday as investors anticipated the European Central Bank was close to the end of its tightening cycle. The EURO STOXX 50 index was up 2.3%, touching its highest level since December 2007, while the pan-European STOXX 600 index rose 1.4% to hit a 17-month high.

The European Central Bank raised interest rates by 25 basis points to their highest in over two decades and dropped a reference to rates having to be “brought” to a level that cuts inflation quickly enough. This raised the possibility of a pause next month, with traders now seeing a roughly 38% chance of a 25 basis-point hike in September compared to 44% before the rate announcement.

The ECB has hiked as expected. But the central bank has actually started to take some of the most aggressive messaging out.