Investing.com - Here are the top five things you need to know in financial markets on Thursday, July 21:
1. Yen jumps after BOJ's Kuroda rules out helicopter money
The yen jumped the most in almost a month against the U.S. dollar on Thursday, after Bank of Japan Governor Haruhiko Kuroda ruled out the idea of using "helicopter money" to stimulate Japan's economy.
The dollar tumbled to a session low of ¥105.43 against the yen. It last traded at ¥105.60, down 1.2% on the day (USD/JPY).
Earlier, the dollar jumped to a six-week high of ¥107.49, following media reports that the Japanese government was planning to compile a stimulus package of at least ¥20 trillion ($188 billion) to help the domestic economy emerge from deflation and to fend off possible adverse effects from Brexit.
2. Global stocks collapse into the red as hopes for BOJ stimulus fades
Global stocks traded mostly down on Thursday, as comments from BOJ Governor Haruhiko Kuroda fueled speculation the central bank may hold fire and not provide more stimulus at its policy meeting next week, dampening appetite for riskier assets.
U.S. stock index futures turned lower following Kuroda's comments on Thursday morning, while traders awaited a raft of both earnings and data.
Meanwhile, European stock markets retreated from four-week highs, as investors looked ahead to the latest monetary policy decision from the European Central Bank.
Earlier, Asian stocks climbed to nine-month highs, with Japanese shares leading gains after local media reports suggested the government was preparing a sizable stimulus package.
3. ECB decision, Draghi press conference ahead
The European Central Bank's interest rate decision is due at 11:45GMT, or 7:45AM ET, on Thursday, with most of the focus likely to be on President Mario Draghi's press conference 45 minutes after the announcement.
The consensus is that the ECB will leave interest rates on hold, while Draghi is expected to hint at further stimulus, forecast to come as early as September, to offset the hit to the economy from Britain's decision to leave the European Union.
4. U.S. earnings season gathers steam
General Motors (NYSE:GM), Southwest Airlines Company (NYSE:LUV), Union Pacific (NYSE:UNP), Blackstone (NYSE:BX), The Travelers Companies Inc (NYSE:TRV), Bank of New York Mellon (NYSE:BK), Domino’s Pizza Group Plc (NYSE:DPZ) and Dunkin Brands Group Inc (NASDAQ:DNKN) are among the dozens of companies reporting second-quarter results before the opening bell.
After the close, Starbucks (NASDAQ:SBUX), AT&T (NYSE:T), Chipotle Mexican Grill Inc (NYSE:CMG), Visa Inc (NYSE:V), PayPal Holdings Inc (NASDAQ:PYPL), Capital One Financial Corporation (NYSE:COF), Schlumberger NV (NYSE:SLB) and Boston Beer Company Inc (NYSE:SAM) report.
U.S. equites have been boosted in recent sessions amid indications the U.S. corporate earnings season may be less dour than feared. According to Thomson Reuters, 67% of the 70 S&P 500 companies reporting so far beat earnings estimates.
Second-quarter earnings for S&P 500 companies are now expected to fall by 3.8%, less than the 4.5% decline estimated earlier in the week, according to Thomson Reuters I/B/E/S.
5. U.S. data in focus amid renewed September rate hike bets
Weekly jobless claims data and the Philadelphia Fed survey are both expected at 12:30GMT, or 8:30AM ET. The FHFA home price index is due at 13:00GMT, or 9:00AM ET, and the index of leading economic indicators and existing home sales are both scheduled for 14:00GMT, or 10:00AM ET.
A recent string of upbeat economic reports, including June housing starts, retail sales, ISM manufacturing and employment were all better than expected, suggesting that economic growth regained speed in the second quarter.
The bullish data could allow the Federal Reserve to raise interest rates much sooner than previously expected. Interest rate futures are currently pricing in a 19% chance of a rate hike by September. December odds were at 51%, compared with less than 20% a week ago and up from 9% at the start of this month.