Eurozone stock markets moved higher yesterday as investors hoped for hints of extra stimulus from the European Central bank, while a clutch of US company earnings boosted US stocks.
“Equities have found renewed bullish gusto as investors contemplate upcoming central bank action,” said Mike van Dulken, head of research at traders Accendo markets.
Outside the Eurozone, London shares also closed higher, as dealers digested news that Britain’s unemployment rate sat at an 11-year low of 4.9%, as the dust settles on its shock decision to exit the EU.
Frankfurt and Paris meanwhile notched up emphatic gains. 
After three days of losses, France’s CAC 40 rallied to close 1.2% up, while Germany’s DAX was 1.6% firmer.
Analysts expect the ECB to hold fire on monetary policy today but to likely prepare the ground for more stimulus in September, as the economic fallout from Brexit becomes clearer.
The central bank meeting takes place one month after the Brexit vote.
“On Thursday, (ECB chief) Mario Draghi is likely to indicate the ECB is willing to ‘do what it takes’ if Brexit interrupts the fragile European economic recovery,” said CMC markets analyst Jasper Lawler.
He noted however that the FTSE has traded relatively flat ever since the bank of England left its key interest rate unchanged last week, confounding expectations for a cut.
The BoE did however flag a likely rate reduction for August.
“Reduced scope for monetary stimulus has scuppered gains on the FTSE 100, which underperformed other European stock averages,” Jasper Lawler, analyst at CMC markets, said.
Solid earnings from Microsoft helped propel US stocks higher, taking the Dow Jones Industrial Average past its all-time high. 
The index has closed at a new record on each of the last six trading days.
Fawad Razaqzada, analyst at FOREX.com, said European markets had been “far less buoyant due to the economic stagnation, troubles with Italian banks, Brexit, a rapid rise in terrorist threats and so on”. 
“But the markets here could start to rise more rapidly should earnings from European companies also start to come out stronger,” he said in a note to investors.
Volkswagen appeared to do just that yesterday, with shares soaring around 6% after the German auto giant posted a better-than-expected operating profit figure.