ECB RATE DECISION EXPECTED ON THURSDAY
Monetary policy will dominate the headlines on Thursday as the European Central Bank (ECB) wraps up its April meeting with an interest rate decision. Although no change in monetary policy is expected, ECB officials could shed light on the future path of quantitative easing and interest rates.
A report on German consumer confidence courtesy of GfK will kick off the European session at 07:00 GMT. The consumer confidence index for the month of May is expected to come in at 10.8 after hitting 10.9 the previous month.
Reports on Spanish unemployment and British mortgage approvals will also make the rounds on Thursday.
The ECB decision is scheduled for 11:45 GMT. Investors can expect the main interest rate to be left at zero and the deposit rate at -0.4%.
Shifting gears to North America, the US government will report on initial jobless claims at 12:30 GMT. The number of Americans filing for first-time unemployment benefits is projected to fall by 2,000 to a seasonally adjusted 230,000 in the week ended 20 April.
The Department of Commerce is scheduled to report on durable goods orders and the overall trade balance at 12:30 GMT. Orders for manufactured goods meant to last three years or more is expected to rise 1.6% in March after surging 3.1% the month before. Meanwhile, Washington’s trade deficit with the rest of the world is forecast to slip to $74.8 billion in March from $75.35 billion in February.
The Federal Reserve Bank of Kansas is scheduled to report its monthly manufacturing survey at 15:00 GMT. An expected reading of +17 for April will undershoot the March tally of +20.
A sliding euro broke below 1.2200 US on Wednesday for the first time since early March. EUR/USD is currently hovering around 1.2170, with immediate support located at 1.2150. The common currency could face an active trading session on Thursday as the ECB votes on monetary policy.
Cable continues to struggle in the face of a rising US dollar. GBP/USD attempted a shallow recovery on Wednesday before swinging back down to the low 1.3900 region. The pair was last seen trading at 1.3936. Rising US yields could determine the short-term outlook for cable, which has given back sizable gains over the past week.
The US dollar continues to surge against its Japanese counterpart, with prices climbing above 109.00 for the first time since February. At the time of writing, USD/JPY was trading at 109.41, where it was little changed compared with the previous close. The pair is looking to break out of a defined trading range between 105-110. However, that could depend on the Bank of Japan’s rhetoric on Friday when it delivers the next interest rate verdict.