Here are the top five things you need to know in financial markets on Thursday, March 10:
1. ECB expected to add more stimulus to combat deflation
Markets await the European Central Bank’s (ECB) monetary policy decision to be released at 12:45GMT or 7:45AM ET, followed by the press conference with the euro zone central bank chief Mario Draghi at 13:30GMT or 8:30AM ET.
In general, consensus forecast the ECB to cut the deposit rate by 10 basis points to -0.4% and increase the asset purchase program, known as quantitative easing or QE, by €10 billion to reach €70 billion monthly, though some market experts spoke of larger amounts for both measures and enumerated other possible actions.
While waiting for the announcement, the euro traded down against all its major rivals with the EUR/USD falling 0.18% to 1.0979 at 10:40GMT or 5:40AM ET while European stock markets generally traded flat with mixed signs. The benchmark Euro Stoxx 50 slipped 0.10%.
2. RBNZ announces surprise rate cut due to risk from China
The Reserve Bank of New Zealand (RBNZ) unexpectedly cut rates on Thursday to a record low of 2.25%, as it blamed the risk of slow growth in China for the decision.
RBNZ governor Graeme Wheeler stressed that the Asian giant was one of the biggest risks to the global economy.
"Any sharp slowing in Chinese growth could have significant implications for global growth, and for the Asia-Pacific region especially," he said.
3. China’s CPI grows at fastest rate since 2014; PBOC may approve equity-debt swap
China’s consumer price inflation (CPI) for February rose at the fastest pace since July 2014, above forecasts and closer to the central bank’s (PBOC) inflation target of 3%, which could restrict the room for more easing in the world’s second largest economy.
Separately, the PBOC was reportedly preparing new regulations to allow commercial banks to swap non-performing loans for equity stakes in the companies themselves in a move designed to increase access to credit for businesses and spur growth in the economy.
4. Oil pulls back from 3-month highs
Oil pulled away from 3-month highs reached on Wednesday after the weekly report on oil supplies showed demand for gasoline and distillates was far higher than expectations, despite oil stockpiles climbing to a fresh all-time high above 520 million barrels.
On Thursday, U.S. crude oil futures fell 1.10%, or $0.42 to $37.87 at 10:43AM GMT or 5:43AM ET, while Brent oil lost 1.46%, or $0.60, to $40.33.
5. Asian stocks show mixed behavior, while European and U.S. equities are cautious
With most market players focusing attention on the aforementioned ECB decision to be released later on Thursday, major Asian markets made diverging moves while the U.S. futures and European stocks opted for caution.
The Nikkei 225 closed with gains of 0.1.26%, while Dow Jones Shanghai slumped 2.05% and S&P/ASX All Australian 200 slipped 0.14%.
At 10:51AM GMT or 5:51AM ET, European stocks markets generally traded in a tight range with the European benchmark Euro Stoxx 50 slipping 0.07%, the DAX inching up 0.02%, the CAC 40 trading down 0.13% and London's FTSE 100 leading the decliners with losses of 0.54%.
U.S. futures also reflected caution with slight gains while at 10:54AM GMT or 5:54AM ET, the blue-chip Dow futures inched up 0.04%, S&P 500 futures added 0.13% and the Nasdaq 100 futures edged forward 0.04%.