Stocks rebounded, led by energy shares, as oil prices rose on a big draw in U.S. gasoline and hopes of major producers agreeing to freeze output, while gold dropped. A disappointing 10-year notes auction pushed Treasuries lower. The euro was little changed ahead of the European Central Bank meeting.
The number of Americans filing for unemployment benefits as measured by the U.S. Labor Department is expected to have decreased 3,000 to a seasonally adjusted 275,000. Separately, the Treasury Department is likely to show a $200 billion budget deficit in February, contrasting a $55 billion surplus in January. Meanwhile, the Commerce Department will release its services sector report for the fourth quarter.
The European Central Bank is almost certain to cut rates deeper into negative territory and agree on some kind of adjustment to its 1.5 trillion euro asset buying program. Any change in QE is going to have unintended side effects and only limited functionality since monetary policy is deep in unconventional territory, nearing its limits. The most likely outcome is a combination of modest measures with a strong verbal commitment to take further action if necessary.