Investing.com - Here are the top five things you need to know in financial markets on Thursday, January 25:
1. Trump touches down in Davos
U.S. President Donald Trump arrived in Switzerland on Thursday to attend the World Economic Forum where he will push his "America First" agenda.
Trump is expected to meet with Israeli Prime Minister Benjamin Netanyahu, British Prime Minister Theresa May, and other world leaders in a tight schedule on Thursday.
White House senior economic adviser Gary Cohn said Trump will use his scheduled speech in Davos on Friday to encourage global companies to invest in the United States and take advantage of Trump's corporate tax cuts, while stressing his "America First" policies and seeking more reciprocal trade policies from U.S. allies.
2. ECB expected to stay on hold until March
The European Central Bank is widely expected to keep interest rates at their current record low levels when it holds its first policy meeting of the year at 7:45AM ET (12:45GMT) on Thursday.
ECB chief Mario Draghi will hold what will be a closely-watched press conference 45 minutes after the rate announcement.
The main focus will be on Draghi to evaluate whether the ECB thinks the euro zone recovery is now so strong that it can end its €2.5 trillion ($3.1 trillion) stimulus program in one fell swoop in September, as some in its ranks have been suggesting recently.
The euro and German Bund yields surged this month after minutes from the ECB's December meeting signaled a revisit to its communication stance in "early" 2018 and specifically a pledge to continue its €2.5 trillion bond-purchasing program.
However, markets widely expect the ECB to hold its course and wait for the March meeting to move forward with any tweaks to guidance.
3. Dollar continues to struggle ahead of ECB and U.S. data
The dollar fell to a fresh three-year low against a currency basket on Thursday, a day after the Trump administration outlined the positive impact from a weaker dollar, appearing to back off the traditional presidential backing of a strong greenback, while the euro was steady ahead of the ECB policy decision.
"Obviously a weaker dollar is good for us as it relates to trade and opportunities," Mnuchin told a press briefing on Wednesday.
The dollar index, which gauges the U.S. currency against a basket of six major rivals, hovered near fresh three-year lows hit overnight of 88.62, a level not seen since December 2014. At 6:02AM ET (11:02GMT), it fell 0.12% to 88.91.
Ahead of the the ECB policy meeting, EUR/USD holding steady near its strongest level since December 2014.
In U.S. data out Thursday, market participants will keep an eye on weekly jobless claims along with the goods trade balance and new home sales, both corresponding to month of December.
4. Oil prices eye new milestones
Oil prices continued to hit flirt with new milestones on Thursday as data released a day earlier showed that U.S. crude inventories declined for a tenth straight week. The weak dollar also supported oil as the exchange translates to lower prices for holders of foreign currencies.
Brent prices topped $71 for the first time since December 2014 on Thursday, mimicking lows seen in the dollar, while the U.S. benchmark last held above the psychological $66 level, also more than a three-year high.
U.S. crude oil futures gained 0.64% to $66.03 at 6:03AM ET (11:03GMT), while Brent oil traded up 0.34% to $70.77, pulling back from an intraday high of $71.20.
5. Wall Street set for new all-time highs
U.S. futures suggested that bullish sentiment in American stocks was set to continue push prices to fresh all-time highs on Thursday. The major indexes are up at least 6% year-to-date as strong earnings and a lower corporate tax rate help maintain optimism in the economy.
At 6:04AM ET (11:04GMT), the blue-chip Dow futures rose 42 points, or 0.16%, S&P 500 futures advanced 5 points, or 0.18%, while the Nasdaq 100 futures gained 30 points, or 0.44%.
Elsewhere, European markets showed mixed trade on Thursday as investors looked ahead to the ECB policy decision and posterior press conference from ECB president Mario Draghi.
Earlier, Asian shares showed caution as market players kept an eye on U.S. trade developments and Japan’s Nikkei 225 led losses, sliding more than 1%, on continued USD/JPY weakness.