The European Central Bank cut its deposit rate to minus 0.1 percent on Thursday, becoming the first major central bank to take one of its main rates negative as it eased monetary policy further at its latest policy meeting.
The ECB cut its benchmark rate by 10 basis points to 0.15 percent and the marginal rate by 35 basis points to 0.4 percent.
The ECB also opened a 400-billion-euro liquidity channel tied to bank lending.
Markets rallied on the news. The S&P 500 rose 0.6 percent on Thursday, hitting another record high. The STOXX Europe 600 rose 0.4 percent.
In the UK, the Bank of England left monetary policy unchanged at its policy meeting on Thursday.
The ECB's latest measures come even as the eurozone economy showed signs of strength on Thursday.
Retail sales in the euro area rose 0.4 percent in April. That pushed the increase over the previous 12 months up to 2.4 percent, the most since March 2007.
Another report on Thursday showed that German factory orders rebounded 3.1 percent in April after having fallen 2.8 percent in March.
Earlier on Thursday, however, a report from China showed that the HSBC services PMI fell to 50.7 in May from 51.4 in April. Nevertheless, the composite PMI rose to 50.2 in May from 49.5 in April.
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