LONDON, Dec 14 (Reuters) - The European Central Bank left interest rates unchanged as expected on Thursday and signalled an early end to its last remaining bond purchase scheme, which helped support the euro.

The euro held on to the day's gains, showing little initial reaction to the ECB decision, while German 10-year bond yields, the benchmark for the wider euro zone sovereign debt market, held mostly unchanged.

Global stocks and bond prices had already shot higher, after the U.S. Federal Reserve left rates unchanged the day before and indicated monetary policy tightening was likely over.

European equities, already trading at their highest in nearly two years on Thursday, stood firm

MARKET REACTION:

FOREX: The euro was last up 0.5% on the day at $1.0924 compared with $1.0912 before the decision.

STOCKS: The region-wide STOXX 600 traded 1.3% higher, having hit its highest in nearly two years earlier in the day.

MONEY MARKETS: Interest-rate futures showed traders now expect around 148 basis points worth of cuts next year, unchanged from Wednesday's close but up from around 113 bps at the start of December.

COMMENTS:

RICHARD CARTER, HEAD OF FIXED INTEREST RESEARCH, QUILTER CHEVIOT, LONDON:

"The ECB has once again held interest rates, and like the Federal Reserve, appears to be at the end of future rate hikes in this cycle, with inflation so close to the magic 2% target."

"Inflation has been falling consistently in the euro zone and came in at just 2.4% last month, indicating that it was almost 'job done' for Christine Lagarde in nursing the economic environment back to normal. But just as rate hikes appear to be at an end, speculation is being fuelled that central banks will now turn to rate cuts in spring next year in order to stimulate growth."

"Higher for longer will continue to be the message, but in Europe that narrative is likely to be tested to the max and we could easily see it have to pivot first out of all the developed central banks."

RICHARD GARLAND, CHIEF INVESTMENT STRATEGIST, OMNIS INVESTMENTS, LONDON:

"The ECB was unlikely to change the deposit rate in this meeting, so there are no surprises here, but like the Bank of England they are keen to manage market expectations as to future rate cuts. Recent sharp falls in inflation are making that job harder and at least for now, central banks are being ignored in their efforts to tame market expectations for rate cuts in 2024." (Reporting by EMEA Markets Team; Editing by Dhara Ranasinghe and Amanda Cooper)