Futures slip as U.S. crude falls below $50
U.S. stock index futures dipped slightly on Thursday as U.S. crude prices fell below $50 and investors remained cautious ahead of Friday’s nonfarm payrolls data that could move the needle on an interest rate hike next week. Also on investors’ minds is a policy announcement from the European Central Bank on Thursday. The bank is expected to back its loose monetary policy, ahead of high-risk elections in France and the Netherlands. Worries over Wall Street valuations and a Federal Reserve keen on raising rates next week have put the brakes on a post-election rally in recent days. The S&P 500 has closed lower for the past three days, setting up the benchmark for its first weekly decline in seven weeks. U.S. crude prices, the main drivers behind Wednesday’s drop, hit $48.79 on Thursday, their lowest since November following a record rise in inventories. Shares of Exxon Mobil and Chevron were off about half a percent in premarket trading.
ECB Keeps Bond-Buying, Rates Unchanged Amid Inflation Flare-Up
The European Central Bank kept its quantitative-easing program unchanged as policy makers gauge whether a recent jump in inflation will endure. The Governing Council reaffirmed its decision that monthly asset purchases will be reduced to 60 billion euros ($63 billion) from April, compared with 80 billion euros currently. Policy makers also left the main refinancing rate at zero and the deposit rate at minus 0.4 percent, as predicted by all economists in a Bloomberg survey. The ECB also said rates will stay at present or lower levels for an extended period, and well past the horizon of net asset purchases. President Mario Draghi will explain the decision in a press conference at 2:30 p.m. in Frankfurt.
China Feb lending slows, but worries on debt load will remain
China’s new loans fell sharply in February from near-record levels the previous month but were still higher than expected, highlighting the difficulties the government faces as it struggles to put rising debt under control. Under its new "prudent and neutral" policy, the People’s Bank of China (PBOC) has adopted a modest tightening bias in a bid to cool explosive growth in debt, though it is treading cautiously to avoid crimping economic growth – which Beijing has said will be lower this year. The February money data released on Thursday contained encouraging signs, as shadow banking activity and mortgage lending shrank from the previous month. And new loans from China’s banks, at 1.17 trillion yuan ($69.32 billion), were far below January’s 2.03 trillion yuan, the second highest ever. But the February number was still above the 920 billion yuan analysts polled by Reuters predicted.
Brazil annual inflation likely fell below 5 percent in February
Brazil’s annual inflation rate probably fell in February to its lowest level since 2010, easing below 5 percent to approach the government target, a Reuters poll showed on Wednesday. The survey’s median forecast was for consumer prices to have risen 4.88 percent in the 12 months through February, slowing from a 5.35 percent increase in January. Brazil targets annual inflation at 4.5 percent, less than half of what it was running at until a year ago. The rapid drop in inflation caused by the country’s worst recession on record has allowed the central bank to slash interest rates, with many investors betting policymakers could accelerate the pace of rate cuts at their next meeting in April. On a monthly basis, prices rose 0.45 percent in February, up from an increase of 0.38 percent in January, according to the median prediction of 25 economists polled.