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Thursday's key focus will be the ECB’s policy rate decision in the early afternoon, followed by the February US inflation print and jobless claims for the week.
ECB Policy Decision (1245 GMT)
The ECB is expected to return to more dovish rhetoric in the policy meeting, reconfirming the December policy setting. Markets are currently pricing up to 3 10 bps hikes by the December meeting, down from the full 50 bps of hikes priced in early in February.
Markets will be paying particular attention to the language surrounding the ECB’s forecasts today. The medium-term inflation outlook will now reflect the new two-way risks of increasing supply-side price pressures and falling economic growth expectations that have resulted from the Ukrainian crisis.
Key signals would be an uptick of the 2024 inflation forecast to 2%, which would imply that they are looking for the opportunity to normalise policy. More likely would be for the 2024 projection to remain at 1.8%, reiterating the ECB aiming for maximum optionality.
Euro weakness due to the Ukraine crisis and its implied volatility against the dollar has seen recent Eurodollar puts become more expensive than ever.
For our comprehensive overview, see our ECB preview here.
US CPI (1330 GMT)
Analysts are seeing a further uptick of US headline inflation to +7.8% y/y for February, with the most recent survey results from this week hinting at upside surprises around the 7.9% to 8.0% mark. On the month, CPI growth of +0.8% m/m is expected, up 0.2 points from January.
The core reading is likely to see another substantial increase to 6.4% y/y from 6.0% y/y, however, the month-on-month growth is projected to slow marginally to +0.5% m/m from 0.6% m/m.
Commodity price pressure resulting from the Ukraine invasion provide further upwards drivers for next month’s inflation print, with WTI oil up around 30% so far this month.
US Weekly Jobless Claims (1330 GMT)
Initial jobless claims are projected to inch upwards by 4k to 219k for last week, following three consecutive months of gradual decline. A downside surprise is likely following last week’s strong nonfarm payrolls addition of +678k (beating forecasts by almost +280k).
Continuing jobless claims are forecasted to reduce further to only 1450k for the week ending February 26. This would be down 26k from the week prior and as such a fresh pandemic-era low.
Strong US labour market data coupled with the expected further acceleration of US inflation will reinforce confidence in the FOMC’s March hike, which markets are certain to be 25bp currently (with some analysts still seeing 50bp on the cards).
Source: US Bureau of Labor Statistics
There are no key policymaker appearances on the schedule today.
| Date | GMT/Local | Impact | Flag | Country | Event |
| 10/03/2022 | 0700/0800 | * |  | NO | CPI Norway |
| 10/03/2022 | 1245/1345 | *** |  | EU | ECB Deposit Rate |
| 10/03/2022 | 1245/1345 | *** | | EU | ECB Main Refi Rate |
| 10/03/2022 | 1245/1345 | *** | | EU | ECB Marginal Lending Rate |
| 10/03/2022 | 1330/0830 | ** |  | US | Jobless Claims |
| 10/03/2022 | 1330/0830 | *** | | US | CPI |
| 10/03/2022 | 1330/0830 | ** | | US | WASDE Weekly Import/Export |
| 10/03/2022 | 1330/0830 | * |  | CA | Intl Investment Position |
| 10/03/2022 | 1530/1030 | ** | | US | Natural Gas Stocks |
| 10/03/2022 | 1630/1130 | ** | | US | NY Fed Weekly Economic Index |
| 10/03/2022 | 1630/1130 | * | | US | US Bill 08 Week Treasury Auction Result |
| 10/03/2022 | 1630/1130 | ** | | US | US Bill 04 Week Treasury Auction Result |
| 10/03/2022 | 1800/1300 | *** | | US | US Treasury Auction Result for 30 Year Bond |
| 10/03/2022 | 1900/1400 | ** | | US | Treasury Budget |
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.