European Central Bank Cut its Deposit Rate

European stocks erased gains, government bonds dropped and the euro recovered from a seven-month low after the European Central Bank cut its deposit rate to minus 0.3 percent from minus 0.2 percent, a smaller decline than some analysts had forecast.

The Stoxx Europe 600 Index was 0.2 percent lower at 12:56 p.m. London time, having climbed as much as 0.9 percent earlier on Thursday. Miners led the declines as metals prices dropped. The 19-nation euro rose 0.5 percent to $1.067 and rallied 0.4 percent to 1.0858 Swiss francs. Germany’s two-year note yield jumped four basis points to minus 0.403 percent.

ECB President Mario Draghi will explain the decision in a press conference at 2:30 p.m. in Frankfurt.

“A 10 basis point cut in the depo rate is less than many had hoped for,” said Marius Daheim, a senior rates strategist at SEB AB in Frankfurt.