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Danny Blanchflower Expects 'Caution' in ECB Decision

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Decision day at the ECB, China-U.S. relations turn frosty, and France wants Britain to pay up. Here are some of the things people in markets are talking about today.

Central banks

The European Central Bank will announce its latest policy decision at 7:45 a.m. Eastern Time. With every economist surveyed by Bloomberg expecting no rate changes, attention will turn to the press conference 45 minutes later, with investors looking for any hints in President Mario Draghi's comments on future stimulus reduction. Overnight, the Bank of Japan announced it was maintaining its policy position unchanged, while yet again delaying the deadline to hit 2 percent inflation. The decision means the bank is increasingly out of step with its developed-world peers. 

Disagreeing on disagreements 

Relations between the world's two largest economies turned frosty as high-level economic talks between China and the U.S. in Washington broke up without the two powers even able to agree on a joint statement to describe their disagreement. Commerce Secretary Wilbur Ross had scolded China over its trade imbalance with the U.S. in his opening remarks, and the meeting, which was attended by Federal Reserve Chair Janet Yellen, failed to produce any concrete commitments from the Chinese delegation. The Trump administration, meanwhile, claimed a dramatic slowdown in new government regulations since President Donald Trump took office, saying the number of economically significant rules has been halved since 2016. 

Show us the money

France has insisted that the U.K. pay a Brexit bill of as much as 100 billion euros ($115 billion), with the country's Finance Minister Bruno Le Maire saying while the amount due was up for debate, the U.K. must pay what it owes as a "non-negotiable prerequisite at the start of talks." British Prime Minister Theresa May has been urged to do more to reassure businesses about her Brexit strategy ahead of a consultation with companies in Downing Street today. There was some good news for May in U.K. retail data released this morning that showed a rebound of 0.6 percent in June, ahead of forecasts, as warming temperatures boosted clothing sales. 

Markets rise

Overnight, the MSCI Asia Pacific Index was unchanged, while Japan's Topix index rallied 0.7 percent following the Bank of Japan decision. In Europe, the Stoxx 600 Index was 0.1 percent higher as investors awaited the ECB decision and press conference. S&P 500 futures were broadly unchanged after the index set another record closing high yesterday. 

Coming up...

It's Thursday, so weekly initial jobless claims data are due at 8:30 a.m., with expectations for a slight decrease from last week's total to 245,000. In earnings today, we get reports from Microsoft Corp., eBay Inc., and Bank of New York Mellon Corp. Yesterday's big bank earnings reports showed Morgan Stanley posted more fixed-income revenue than Goldman Sachs Inc. for the second quarter in a row. 

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