European Central Bank President Mario Draghi to stick with QE

Traders work on the floor of the New York Stock Exchange. Photo / Getty Images

As Wall Street was closed for a holiday, equities in Europe were mixed as European Central Bank President Mario Draghi signalled that the quantitative easing program was here to stay for now.

"The economic upswing is becoming increasingly solid and continues to broaden across sectors and countries," Draghi said In a speech to European Parliament.

"Overall, we remain firmly convinced that an extraordinary amount of monetary policy support, including through our forward guidance, is still necessary for the present level of underutilised resources to be re-absorbed and for inflation to return to and durably stabilise around levels close to 2 per cent within a meaningful medium-term horizon," Draghi said.

Europe's Stoxx 600 Index ended the day little changed from the previous close. France's CAC40 Index slipped 0.1 per cent.

Germany's DAX Index rose 0.2 per cent. Shars of Lanxess jumped 9.2 in Frankfurt after Warren Buffett's General Reinsurance unit bought a 3 per cent stake in the German maker of chemicals.

In Italy, the FTSE MIB shed 2 per cent following comments from former Prime Minister Matteo Renzi suggesting there could be early elections this autumn, instead of May 2018.

"The risk of early elections has suddenly increased to 60 per cent," LC Macro Advisers founder Lorenzo Codogno told Reuters. "A hung parliament is thus the most likely outcome."

UK markets were also closed.

Polls suggesting that Prime Minister Theresa May will still win UK national elections on June 8, though no longer by the landslide expected when she called the snap vote, arrested the slide of the pound.

"Theresa May is certainly the overwhelming favourite to win but crucially we are in the territory now where how well she is going to win is uncertain," John Curtice, professor of politics at the University of Strathclyde and president of the British Polling Counci, told Reuters.

"She is no longer guaranteed to get the landslide majority that she was originally setting out to get," Curtice noted.

US financial markets were closed for the Memorial Day holiday.

Investors will eye the latest US jobs data this week to gauge whether the pace of Federal Reserve interest rate increases is set to remain on track.

Speaking on the sidelines of a conference in Singapore, San Francisco Fed President John Williams said he expected the central bank would raise rates three times this year, including the March rate increase, according to media reports.

The bond market is signalling policy makers will hike in June, pricing in about 80 per cent odds, according to Bloomberg.