By James Langton

(June 8 – 09:00 ET) – The European Central Bank surprised markets this morning by raising rates 50 basis points, most traders expected a 25 bps hike. The move immediately boosted the euro, and equity markets have held up in the face of the unexpected move.

There’s no major economic data out elsewhere in the world today. Although in the U.S. new jobless claims are at their highest since January, up 20,000 to 309,000. U.S. May import prices excluding fuel fell 0.2%, the biggest drop since June 1999.

Stocks have come off earlier highs in Europe, but they remain in the black. London’s FTSE is up 23 points to 6527. France’s CAC 40 is up 32 points to 6530. In Germany the DAX is up six ticks to 7299.

In aftermarket trading Microsoft Corp. rose on the news that the judge in its anti-trust has ordered its breakup into two parts. The decision will be appealed and there were minimal immediate restrictions placed on the firm pending an appeal that will likely take several years.

Dutch phone firm Royal KPN NV says it’s prepared to reopen talks with Telefonica SA about a merger. Bell Canada International Inc. and Telefonos de Mexico SA have agreed to invest US$1.8 billion in a joint venture in South America . OPEC says it is considering boosting output yet again as prices spike up and threaten to spark inflation.

In Asia markets were slightly negative overnight. The Nikkei finished down 140 points to 17004. The Hang Seng dropped 23 points to close at 15876.

Canada Mortgage and Housing Corporation is reporting that the annual rate of housing starts in Canada fell 10.4% in May to 142,100 units.