European Central Bank drops option to boost crisis-era stimulus

Euro Turns to ECB for Directional Cues EUR  GBP EUR  USD in Ranges

Eyeing the easy money exit: Five questions for the ECB

Friday's nonfarm payrolls data for February, a key barometer of the USA economy, is also being awaited for further clues on the pace of Federal Reserve rate increases. That, in theory, should lower borrowing rates and raise inflation and growth.

A number of policymakers on the governing council favour a sudden stop to the €30bn monthly asset purchase program in the aftermath of that date, while some favour a change to the wording with respect to downside risks to the economy. Trump has long singled out China for being unfair in trade practices, but experts say tariffs would hurt USA allies Canada and the European Union far more.

"In turn, that could open up further breathing space for European shares". The BATS 250 was up 0.6% at 18,086.57, and the BATS Small Companies up 0.3% at 12,241.68. The French CAC 40 rose by 0.22% lifted by utilities, the Italian FTSE MIB 100 climbed by 0.17% and the UK's FTSE 100 was flat.

Stocks in the United States were called for a mixed open on Thursday ahead of the data.

U.S. West Texas Intermediate and international-benchmark Brent crude oil finish lower on Thursday, led by several factors including signs of an inventory build at the U.S. futures delivery hub in Cushing, Oklahoma, surging U.S. crude production and investor concerns about a potential trade war. WTI crude and Brent slipped to $61.09 (-0.10%) and $64.17 (-0.26%) per barrel respectively.

Banking stocks, which benefit from prospects of tighter monetary policy, however, spiked higher following the ECB's decision.

Euro Turns to ECB for Directional Cues EUR  GBP EUR  USD in Ranges
ECB Meets Amidst Tough Talk on Trade

The specter of a global trade war has had markets on edge this week, as Trump's threats of steel and aluminum tariffs were met with talk of retaliation in China and Europe. In new forecasts, the bank kept the outlook for expansion largely unchanged for the next three years.

Economic growth in the eurozone, while robust, has never reached levels in this cycle to have caused any inflationary problems. Since the latest macro projections in December, economic data has continued to surprise to the upside, increasing the risk that we could see a modest upward revision to the GDP growth estimates.

Stock markets continued their recent rollercoaster ride yesterday with European markets shrugging off the departure of Gary Cohn, President Trump's chief economic advisor, despite the fact that it would appear to make the prospect of tariffs nearly inevitable. The White House said late on Wednesday that Canada, Mexico and possibly other countries may be granted exemptions, at least for a while. "This outlook for growth confirms our confidence that inflation will converge towards our inflation aim of below, but close to, 2% over the medium term", Draghi said in his opening statement.

The dollar changed hands at 105.97 yen, little changed in Europe, keeping some distance from its 16-month low of 105.24 touched on Friday.

In Canada, the economic calendar will feature figures on February's housing starts (1315 GMT) and January's building permits (1330 GMT) with both indicators expected to come in weaker.

However, other analysts believe political uncertainty in Italy and Trump US tariffs could weigh on the ECB's decision to remove the easing bias line.

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