Morning Bid: ECB to cut, markets want clues on next move
A look at the day ahead in European and global markets from Tom Westbrook
The European Central Bank is expected to make its first back-to-back rate cut in 13 years on Thursday. With that in the price, the policy outlook will be traders’ focus and it will need to sound pretty dovish to drive the euro lower still.
The common currency is already down 2.4% for October and rates markets are pricing more cuts in Europe next year than in the U.S. – even though U.S. rates sit above 4.75% and European rates are at 3.5%.
Results at chipmaking giant TSMC could also move markets, especially after a disappointing outlook from chip equipment supplier ASML (AS:ASML) set off a sharp fall in semiconductor shares earlier in the week.
TSMC profit is expected to have leapt 42% in the third quarter to just over T$300 billion ($9.3 billion), on soaring demand for artificial intelligence applications. It will give fourth-quarter revenue guidance in U.S. dollars.
Earnings at pest control company Rentokil are due in London and could be an indicator of global economic conditions. The company’s UK shares have slid precipitously to more than four-year lows.
U.S. retail sales data and earnings at Netflix (NASDAQ:NFLX) will also be parsed for insights on consumers’ mood.
Asia trade on Thursday was reasonably steady but marred, yet again, by disappointment with Chinese authorities who announced policy measures far short of what markets have been hoping for. Beijing promised easier access to credit for builders to complete unfinished housing projects.
Iron ore prices and real estate shares slid in China, while the Australian dollar – which had caught a boost from stronger-than-expected jobs numbers – pared early gains. [MKTS/GLOB]
Key developments that could influence markets on Thursday:
– ECB policy decision and news conference
– U.S. retail sales
(By Tom Westbrook; Editing by Edmund Klamann)
