US pre-open: Stocks set for small gains as investors eye ECB

Stocks on Wall Street looked poised for small gains at the open on Thursday, with investors likely to stick to the sidelines as they await the outcome of the latest European Central Bank meeting.

At 1140 GMT, Dow Jones Industrial Average futures were up 0.2%, while S&P 500 and Nasdaq futures were 0.3% firmer.

At the same time, West Texas Intermediate was down 1% to $37.89 a barrel and Brent crude was 1.4% lower at $40.50.

“US markets look set for a slightly higher open with the eventual direction likely to be heavily influenced by the level of satisfaction in markets over any further easing of monetary policy by the ECB,” said Jasper Lawler, market analyst at CMC Markets.

Market participants are pricing in a 10 basis points cut to the deposit rate, an extension of asset purchases and possibly even the introduction of tiered interest rates.

“Recent years have seen markets expect to see Draghi blow them away with a bumper round of easing, but more often than not, the ECB has failed to deliver. The introduction of LTROs, OMTs, TLTROs and numerous rate cuts have often failed to impress financial markets, which glance enviously towards the QE policies of the UK and US as a guide to what represents a sufficient policy shift,” said Joshua Mahony, market analyst at IG.

“Once more we are back to the situation where only a shift in QE will suffice and thus unless we see a rise to the current €60bn monthly asset purchases, there is a good chance disappointment will dominate.”

The ECB rate announcement is at 1245 GMT, followed by the press conference at 1330 GMT.

On the data front, investors will eye the release of US initial jobless claims at 1330 GMT.

In corporate news, Square Inc and Box Inc were up in pre-market trading following well-received earnings late on Wednesday.

Box, an online file sharing and content management service, posted a smaller-than-expected loss of 26 cents per share for the fourth quarter, on revenue of $85m.

Meanwhile, mobile payments company Square said gross payment volume increased 47% in the fourth quarter to $10.2bn.

In currency markets, the dollar was flat against the pound, and 0.3% firmer versus the euro and the yen.