ECB minutes and U.S. jobless claims to watch

In line with a global sell-off, European shares are expected to open lower on Thursday, as markets were spooked by more aggressive comments about tighter monetary policy from U.S. policymakers, which kept the dollar near a two-year high, amid expectations for ECB's minutes of March meeting.

Fed's minutes

Following the Fed speakers and the minutes yesterday, attention has really turned to quantitative tightening, intended to tighten financial conditions and dampen economic activity. In addition, they generally agreed on slashing $95 billion a month from asset holdings that soared during the pandemic. The Fed's decision was mostly in line with market expectations. However, the eagerness of policymakers to begin as early as May was a bit surprising and is likely to keep the dollar at a high level.

As the ECB's March meeting minutes are due later today, they are unlikely to contain such hawkish plans. However, they might provide insight into policymakers' delicate balancing act to control soaring inflation and weakening growth.

Bonds sell-off after Fed's minutes

After releasing the Fed's minutes, U.S. Treasuries sold off sharply before stabilizing.

Ten-year Treasury note yields were little changed in early Asia on Thursday, sitting at 2.590%, while 2-year note yields were slightly lower at 2.45111%, resulting in a steeper yield curve after starting the week inverted.

Oil prices bounced on the verge of $100

On Thursday, oil prices recovered some losses after plummeting more than 5% to a three-week low as consuming nations released massive oil from emergency reserves to offset Russian supply cuts.

Following Russia's invasion of Ukraine, IEA member countries agreed to release 60 million barrels on top of a 180 million barrel release announced by the U.S. last week to help drive down prices in a tight market. In the absence of inventory buffers, demand destruction and recession are the only mechanisms for lowering prices in addition to the release of enormous global reserves.

Events of today

Eurozone retail sales for February are due later on Thursday on the economic data front.

Later in the day, the European Central Bank will also release its meeting minutes. Despite being expected to adopt a less hawkish tone than the Fed, the ECB attempts to strike the right balance between curbing inflation without entering a recession.

Investors will also look forward to the weekly jobless claims report, which is expected to show 200,000 claims.