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Day Ahead: Top 3 Things to Watch

Published 03/07/2018, 04:15 PM
Updated 03/07/2018, 04:15 PM
© Reuters.  What to watch out for in tomorrow's session

© Reuters. What to watch out for in tomorrow's session

Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow

1. ECB To Hint At Policy Shift?

The European Central Bank delivers its interest decision on monetary policy on Thursday at 07:45 a.m. ET and is widely expected to leave its interest, marginal lending and deposit facility rates unchanged at 0%, 0.25% and -0.4%, respectively.

The ECB’s monetary policy decision will be accompanying by an appearance from ECB president Mario Draghi in a press conference at 08:30ET.

Draghi’s comments are likely to monitored closely amid expectations the ECB president could confirm a gradual shift toward a less dovish stance in the central banks’ policy outlook.

Analysts at Rabobank downplayed the impact on the single currency of a change in forward guidance, however, as the market has priced in expectations that the ECB will unwind its stimulus programme later this year.

“Any adjustment to the forward guidance will have a minimal impact given the market has already accepted the fact that the program will be wound down between end-September and December this year,” said strategist Matthew Cairns.

EUR/USD rose 0.06% to $1.2412.

2. US Dollar To Extend Sluggish Run?

While the dollar bounced off its lows late in the session Wednesday, sentiment on the greenback remained mostly negative despite reports suggesting that the Trump may exempt Canada and Mexico from tariffs on steel and aluminium.

Labor market and consumer confidence data Thursday could turn sentiment on the greenback positive ahead of the all-important nonfarm payrolls data due Friday.

The Labor department releases its weekly count of the number of individuals who filed for unemployment insurance for the week ended March 2, expected to show an increase to 220,000 from 210,000 the prior week. Continuing jobless claims are expected to have increased to 1.921 million for the week ended March 2 from 1.931 million.

The Bloomberg Consumer Confidence Index – which measures views on the condition of the U.S. economy, personal finances and the buying climate – will also be monitored after falling to a reading of 56.2 last week.

3. China Wholesale, Consumer Data In Focus

China releases February consumer and producer price inflation on Thursday. The reports are expected to show that consumer prices rose by an annualized 2.5% in February from 1.5% the previous month. While producer prices are forecast to show a decline of 3.8% on a year-over-year basis.

In the PBOC’s most recent quarterly monetary policy report released in February, the central bank said rising commodity prices and base effects raises the possibility of a faster pace of inflation.

Commodities such as gold are highly sensitive to Chinese economic data as the Asian nation is the largest consumer of commodities.

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