All eyes are on the latest inflation numbers outside the euro zone as market players consider what the ECB is going to do next.
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Inflation in the euro zone eased slightly in February, following comments by the head of the European Central Bank that it will take some time for rate cuts.
Headline inflation in the 20-member bloc stood at 8.5% in February, according to preliminary data released Thursday. This indicates that the price has not declined from the prices recorded in recent months. Headline inflation stood at 10.6% in October, but reached a revised 8.6% in January.
Analysts polled by the Wall Street Journal expected the February inflation rate to be a lower 8.2%.
Food prices rose month-on-month, offsetting declines in energy costs.
Core inflation rose to 5.6% in February from 5.3% in January.
In recent days, market players have wondered whether the ECB should keep its dovish stance longer, following better-than-expected February inflation figures from France, Germany and Spain.
ECB President Christine Lagarde said on Thursday that it will take more time to reduce inflation, according to a Reuters report. The bank is targeting a headline rate of 2%.
The Frankfurt-based firm indicated that another 50 basis point hike is on the cards when the central bank adjourns later this month. In comments reported by Reuters, Lagarde said on Thursday that the move was still on that schedule as inflation remained above target.
Analysts at Goldman Sachs said earlier this week they were raising rate hike expectations for the ECB, pricing in another 50 basis point hike in May.
European bond yields have hovered near multi-year highs in recent days, amid suggestions that hawkish monetary policy is here to stay.
