World stocks held just below this week's record high on Thursday while the euro was steady as investors bet the worst of the credit crisis is over and looked to the European Central Bank chief for clues on monetary policy.
Both the ECB and Bank of England left interest rates on hold as expected. ECB President Jean-Claude Trichet holds a news conference at 8:30 a.m. EDT (1230 GMT) when he is likely to face questions on the impact of the credit crisis and a surging euro.
European shares erased early losses, led by a rally in banking shares, while U.S. stock futures pointed to a firmer open on Wall Street. Emerging markets were easier, in line with weaker energy and commodity prices.
Recent interest rate cuts by the Federal Reserve, speculation of easing later this year in Britain and dwindled expectations for a hike in the euro zone have fuelled a rally in risky assets following a sell-off during the credit crisis.
Disclosure by big banks this week about their credit-related losses also helped investors to shift their focus back on strong economic fundamentals.
Most of the bad news has been discounted, said one trader. People seem somewhat relaxed about the subprime (mortgage debt) issues as companies have held up their hands and admitted to losses.
MSCI's main world equity index was down 0.2 percent but near a record high on Wednesday. The FTSEurofirst 300 index was up a quarter percent.
Equity markets are purely trading off sentiment and once we've got all bad news away, third quarter earnings numbers will be the focus, said Neil Parker, market strategist at RBS.
Gold fell to $725.40 an ounce, showing little reaction to an accident in South Africa which trapped 3,200 miners deep underground. Shares in mine owner Harmony Gold fell more than 4 percent at one point.
The euro was steady at $1.4108 but below its all-time high above $1.42 hit earlier this week.
Money market rates are easier, with three-month interbank lending rates for euro and sterling falling at their daily fixing.
Sterling rates edged lower after the BoE said it would hold a round of fixed-rate money market operations, comprising repos at 5.75 percent -- its benchmark rate -- maturing on October 11.
The iTraxx Crossover index, the most-widely watched indicator for European credit market sentiment, tightened, while emerging sovereign spreads narrowed by 3 bps.
The December Bund future was up 5 ticks on the day.
London Brent crude was down 0.2 percent, moving further away from September's record high.