London morning: Nikkei 225 gains 1.10%, Wall Street closes higher, ECB and US GDP due

Asian equities were higher on Thursday, with the Nikkei 225 at 64659.47 at 15:25 Tokyo time, up 1.10% on the day. US stocks ended Wednesday's session higher.

What happened

The Nikkei 225 stood at 64659.47 at 15:25 Tokyo time on Oct. 29. That is a gain of 705.28 points, or 1.10%, from the previous close of 63954.19. The reading was taken shortly before the end of the Tokyo session.

On Wall Street, the S&P 500 closed at 7743.98 on Oct. 28. The index rose 21.38 points, or 0.28%, from a previous close of 7722.6. The reading is as of 16:00 New York time.

The NASDAQ 100 closed at 29813.16, up 161.72 points, or 0.55%. Its previous close was 29651.44. The technology-heavy index therefore gained about twice as much in percentage terms as the S&P 500.

Both US benchmarks finished the session with gains, and the Tokyo market moved in the same direction a few hours later. Taken together, the three equity indexes in this morning's data all stand above their previous closes.

Currency and cross-market picture

EUR/USD stood at 1.1145 at 08:00 UTC. That is 0.0011 lower, or -0.10%, from the previous close of 1.1157. The euro is trading slightly softer ahead of the central bank meeting later today.

The session on the Italian Stock Exchange runs from 09:00 to 17:30 Rome time, so European cash markets open shortly after this report. Investors in Europe start the day with a higher Tokyo close in Asia and higher closes on both main US indexes.

The two US indexes moved in the same direction on Wednesday. The S&P 500 added 0.28% and the NASDAQ 100 added 0.55%. Tokyo's advance of 1.10% was the largest of the three equity moves in this morning's data.

The euro-dollar pair is the only currency quote in this morning's data. Its small decline of 0.10% leaves it close to its previous close of 1.1157, and the day's two main scheduled events, one from each side of the Atlantic, both fall within the European afternoon.

The data and policy calendar

Today's calendar is dense. The main US releases arrive together at 12:30 UTC, and the European Central Bank announces its decision at 13:15 UTC.

US third-quarter GDP growth is due on a quarter-on-quarter basis. The estimate is 3.2%, and the previous reading was 2.2%. This is the largest item in the 12:30 UTC cluster.

September core PCE inflation is also scheduled. The month-on-month estimate is 0.3%, against a previous 0.2%. The year-on-year estimate is 3.1%, against a previous 3%.

Personal income for September has an estimate of 0.3% month on month, with a previous reading of 0.2%. Personal spending has an estimate of 0.6%, and the previous reading was 0.9%.

Background: previous values and the labor market

The labor market figures arrive at the same time. Initial jobless claims for the week to Oct. 24 have an estimate of 199 K, and the previous figure was 194 K. Continuing claims for the week to Oct. 17 have an estimate of 1720 K, against a previous 1728 K.

The four-week average of jobless claims has an estimate of 197 K, and the previous value was 197.75 K. These series show how many people are filing for or receiving unemployment benefits.

Initial claims count people who file for unemployment benefits for the first time in a given week. Continuing claims count people who keep receiving benefits after that first week. The four-week average smooths the weekly initial claims figure, so a single unusual week has less weight.

The eight US releases at 12:30 UTC therefore cover three areas: output, with third-quarter GDP; prices and household finances, with core PCE, income and spending; and employment, with the three jobless claims series.

Why it matters

The PCE price index is a US inflation gauge. The core measure excludes food and energy. Its release alongside GDP and household income and spending gives a combined view of growth, consumption and prices in one hour.

The previous readings give the starting point. Core PCE rose 0.2% month on month in the prior report and 3% year on year. Personal spending rose 0.9% in the previous month, and the estimate for September is 0.6%. GDP growth was 2.2% in the previous quarter.

For Europe, the ECB decision is the central event. The interest rate decision has an estimate of 2.65%, and the previous level was 2.65%. The deposit facility rate has an estimate of 2.5%, and the previous level was 2.5%.

The deposit facility rate is the rate banks receive on money left overnight at the central bank. It is one of the ECB's key policy rates, so the announcement is closely followed by currency and bond markets.

The wording of the decision and the press conference are therefore also part of what the market follows, alongside the rate figures themselves.

What to watch next

The first event is the US data cluster at 12:30 UTC. GDP, core PCE, income, spending and jobless claims will all be published at that moment.

The ECB announces its rate decision at 13:15 UTC. The press conference follows at 13:45 UTC, where the central bank explains the decision. The calendar lists no figures for the press conference itself.

Later in the day, European markets will have the combined information from the US releases and the ECB decision. The Nikkei's move and the US closes provide the starting point for those sessions.

EUR/USD has two scheduled events within about an hour of each other, the US data and the ECB announcement. At 08:00 UTC it stood at 1.1145, against a previous close of 1.1157.

The sequence of the day in UTC is simple. The European open follows this report, the US releases come at 12:30, the ECB decision at 13:15 and the press conference at 13:45. The Italian Stock Exchange session continues until 17:30 Rome time, so it covers all three events.