Here are the top five things you need to know in financial markets on Thursday, October 20:
1. ECB chief Draghi may hint at December action
The European Central Bank's latest interest rate decision is due at 11:45GMT (7:45AM ET) on Thursday, with most of the focus likely to be on president Mario Draghi's press conference 45 minutes after the announcement.
The ECB is not expected to move on rates, but Draghi could offer fresh clues on the time frame of its €80 billion monthly asset-buying program, due to run out in March.
A recent Reuters poll of economists showed that a stable but lackluster economic outlook will push the ECB to extend its stimulus program by year-end, although such a move will likely be reserved for December’s meeting when the central bank’s updated quarterly projections will be available.
Ahead of the events, the euro was trading at a three-month low against the dollar.
2. U.S. gears up for data dump
Thursday’s economic calendar was set for a busy session with investors set to digest to weekly jobless claims and the Philadelphia Fed manufacturing index for October at 8:30AM ET (12:30GMT)
At 10:00AM ET (14:00GMT), September existing home sales and the Conference Board’s leading index for the same month will be released.
With regard to the U.S. central bank, New York Fed chief William Dudley has a busy schedule with appearances throughout the day.
Late Wednesday, Dudley made it clear that he expects the Fed to hike rates this year.
December remained the markets’ best bet for a move with odds standing at 64.8%, according to Investing.com’s Fed Rate Monitor Tool.
3. Blue-chip earnings continue to be on the radar
Market participants will continue to digest corporate numbers after eight out the 13 S&P 500 companies reporting earnings during Wednesday’s session managed to beat estimates.
With a total 70 companies in the S&P 500 having reported earnings through Wednesday morning, 80% have topped expectations. Analysts now expect the components of the benchmark index to break a five quarter losing streak.
Among Dow components, American Express (NYSE:AXP) will likely add to the bullish sentiment in stocks as its shares surged nearly 5% in pre-market trade Thursday on the back of an increased profit forecast released with better-than-expected revenue after the market close a day earlier.
Other blue chip firms scheduled to report earnings on Thursday include Microsoft (NASDAQ:MSFT), The Travelers Companies Inc (NYSE:TRV) and Verizon Communications Inc (NYSE:VZ).
4. Oil down 1% on profit-taking
Oil prices fell on Thursday as traders locked in profits following a rally in the previous session when the U.S. Energy Information Administration reported an unexpectedly large U.S. oil inventory drawdown last week.
Crude rallied on Wednesday, with U.S. crude settling at a 15-month high after the EIA said U.S. oil inventories fell by 5.2 million barrels last week, compared to forecasts for a stockpile build of 2.7 million barrels.
U.S. crude oil futures fell 0.98% to $51.31 at 5:56AM ET (9:56GMT), while Brent oil traded down 1.75% to $48.94.
5. Global stocks edge mostly higher
With the exception of London’s FTSE 100 that slipped lower on Thursday, European stocks edged up as investors grew cautious ahead of the European Central Bank’s policy meeting, scheduled later in the day.
Earlier, Asian stocks advanced on Thursday, propelled by strong U.S. earnings and oil prices near a 15-month high, as the third and final U.S. presidential debate before the Nov. 8 election ended.
Meanwhile, U.S. futures pointed to flat open as market players awaited more corporate earnings and a slew of data. Specifically, the blue-chip Dow futures rose 0.16%, by 5:56AM ET (9:56GMT), S&P 500 futures added 0.11% and the Nasdaq 100 futures gained 0.12%.