[UPDATE] European Markets Trade Higher As BOE And ECB Keep Rates Unchanged

Update: 8:10 a.m. EDT: European Central Bank leaves benchmark interest rate unchanged at 0.5 percent.

European markets rose on Thursday, rebounding from a two-week low recorded in the previous session, as investors looked ahead to an interest rate decision from the European Central Bank, or ECB, after the Bank of England, or BoE, kept rates unchanged.

The BoE's move was in line with analysts' expectations who don’t expect the ECB to announce significant changes to its policies either.

"There is a general consensus that the ECB will not touch rates or announce any new additional measures although personally I expect Draghi to be a little more dovish than at the last meeting," Luca Cazzulani, UniCredit interest rate strategist told Reuters.

The BoE's Monetary Policy Committee, which held its first meeting under new governor Mark Carney, voted to keep the official Bank Rate paid on commercial bank reserves steady at 0.5 percent, noting in an official statement, that "market interest rates have risen sharply internationally and asset prices have been volatile."

A recovery is in progress in the UK, however, "it remains weak by historical standards and a degree of slack is expected to persist for some time," the statement added.

“Next month’s meeting will get down to business as the inflation report will include a review of the merits of forward guidance,” Olivier Korber, strategist at Societe Generale, said about the Bank of England’s policy meeting, MarketWatch reported before the BoE's decision.

The European Central Bank, or ECB, is expected to announce its policy decision at 7:45 a.m. EDT, while ECB President Mario Draghi will hold a press conference starting at 8:30 a.m. EDT.

Earlier in the day, investors seemed to shake off concerns over a political crisis in Portugal as the country’s stock markets rose on Thursday, while bond yields slipped. The Portugal PSI 20 index gained 2.46 percent, while the yield on Portugal’s 10-year government bond dropped 8 basis points to around 7.22, as investors appeared to come to terms with the ongoing political turmoil in the country triggered by the resignations of two ministers.

The Stoxx Europe index rose 0.7 percent offsetting a 0.6 percent loss in the previous session, while French CAC 40 index rose by 0.84 percent, helped by a surge in banking stocks. Germany’s DAX 30 index gained 0.62 percent in morning trade and in London, the FTSE 100 index was up 0.8 percent.

In Asia, most markets gained on Thursday, tracking Wall Street's performance on Wednesday and positive economic data from the U.S., while the yen's strengthening over the dollar weighed on Japanese stocks, pushing the Nikkei down 0.26 percent for the day.

Hong Kong’s Hang Seng surged 1.60 percent while China's Shanghai Composite index closed up 0.59 percent. In South Korea, the KOSPI gained 0.79 percent and Australia's the S&P/ASX 200 ended up 0.59 percent. India’s BSE Sensex ended the day up 1.22 percent.

U.S. markets are closed on Thursday for the 4th of July Independence Day holiday, and will resume trading on Friday when crucial U.S. employment data are due to be released. Economists expect the U.S. economy to have added 155,000 jobs in June, less than the 175,000 it added in May, according to MarketWatch.