Here are the top five things you need to know in financial markets on Wednesday, March 9:
1. Rate speculation takes hold: bets on BoJ and ECB with BoC on docket
Market players are focused on the European Central Bank’s (ECB) monetary policy decision scheduled for Thursday with at least a 10 basis point decrease in the deposit rate along with a €10 billion monthly increase in the asset purchase program (known as quantitative easing or QE) apparently priced in.
However, speculation on the next move by the Bank of Japan (BoJ) took the headlines on Wednesday as Reuters cited sources close to the Japanese bank as indicating that policymakers will hold off on further cutting rates at their policy rating next week.
The report didn’t appear to complete rule out any action as the agency’s sources suggested that if the BoJ were to act, it would prefer to increase asset purchases.
Market players also have a pending appointment on Wednesday with the Bank of Canada (BoC) later in the day at 15:00GMT or 10:00AM ET. The Canadian central bank was forecast to leave interest rates unchanged at 0.50%.
2. Oil bounces back while waiting for U.S. inventory data
Black gold continued to trade with volatility, bouncing back on Wednesday from the prior day’s dive caused by worrisome Chinese trade data.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. oil inventories rose by 4.4 million barrels in the week ended March 4, compared to forecasts for a gain of 3.0 million barrels.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 15:30GMT, or 10:30AM ET, amid expectations for a gain of 3.9 million barrels.
On Wednesday, U.S. crude oil futures gained 1.42% to $37.02 at 10:51AM GMT or 5:51AM ET, while Brent oil advanced 1.72% to $40.33.
3. U.K. manufacturing production returns to growth, but Germany and France expect slowdown
In a light economic calendar, U.K. manufacturing and industrial production gave a hopeful sign as both returned to growth in January, according to official data released on Wednesday.
However, worries remained in the euro zone as the German banking association BdB forecast a slowdown for growth in the region’s largest economy during the next two years and the Bank of France also cut its estimate for growth in the French economy during the first quarter.
4. China cuts custom fees to support trade
After China reported the worst decline in exports in six years, the Asian giant’s customs office announced on Wednesday plans to cut fees to help bolster trade.
The worrisome trade data came just days after the Chinese government targeted annual growth of 6.5% to 7%.
5. Global stocks register mixed trade on Wednesday
The Nikkei 225 closed with losses of 0.84%, while Dow Jones Shanghai slumped 1.42% and S&P/ASX All Australian 200 bucked the trend adding 0.96%.
At 10:52AM GMT or 5:52AM ET, European stocks markets moved broadly higher with the European benchmark Euro Stoxx 50 rising 0.77%, the DAX advancing 0.71%, the CAC 40 gaining 0.74% and the FTSE 100 trailing with gains 0.28%.
U.S. futures were trading with slight gains and, at 10:54AM GMT or 5:54AM ET, the blue-chip Dow futures inched up 0.38%, S&P 500 futures added 0.37% and the Nasdaq 100 futures advanced 0.40%.