Here are the top five things you need to know in financial markets on Thursday, February 25:
1. China tumbles, though Europe and the rest of Asia rise
Dow Jones Shanghai broke the general bullish trend in stocks and crashed 6% on Thursday, its biggest one-day decline in a month. Experts cited profit-taking, liquidity concerns in the financial sector and concern over the cooling economy.
Yet the negative market sentiment was contained with solid gains in the rest of Asia and Europe. The Nikkei 225 traded up 1.41% while the S&P/ASX All Australian 200 edged up 0.13%.
At 11:21AM GMT or 6:21AM ET, European stocks moved up across the board while the benchmark Euro Stoxx 50 rose 1.59%, while US futures didn’t share the enthusiasm with the blue-chip Dow futures slipping 0.05%, S&P 500 futures also dropping 0.08% and the Nasdaq 100 futures trading down 0.14%.
2. Inflation data puts pressure on the ECB
Consumer price inflation in the euro zone was revised down unexpectedly in January, adding to concerns over deflationary pressures, official data showed on Thursday.
In a report, Eurostat said consumer price inflation rose by a seasonally adjusted 0.3% last month, down from a preliminary estimate of 0.4%. Euro zone inflation rose by 0.2% in December.
The lack of price pressure in the single-currency area could spur the European Central Bank (ECB) to embark on additional expansionary policy at its next meeting on March 10.
3. Oil edges lower despite Wednesday’s recovery
Oil prices edged lower in European trade on Thursday, after weekly stockpile data showed that U.S. oil inventories rose to an all-time high last week, underlining concerns over ample supplies.
The U.S. Energy Information Administration said Wednesday that U.S. crude stockpiles increased by 3.5 million barrels last week to an all-time high of 507.6 million barrels, underlining concerns over a domestic supply glut.
Crude oil for April delivery on the New York Mercantile Exchange shed 2 cents, or 0.06%, to trade at $32.13 a barrel by 11:27AM GMT or 6:27AM ET, A day earlier, New York-traded oil futures reversed losses of more than 2% to end up 28 cents, or 0.88%.
4. Sterling trades flat near seven-year lows
The pound was trading flat close to seven-year lows against the dollar on Thursday as worries over a possible British exit from the European Union, known as Brexit, continued to weigh on market sentiment.
GBP/USD inched up 0.07% stood at 139.36 at 11:30GMT or 6:30AM ET, while GBP/JPY gained 0.15% to 156.46 and EUR/GBP traded up 0.06% at 0.7915.
5. Investors await key U.S. data
Traders will watch two key pieces of economic data stateside to be published on Thursday at 13:30GMT or 8:30AM ET. Analysts forecast that initial jobless claims will rise to seasonally adjusted 270,000 for the week ending February 20. The prior data declined unexpectedly to a 12-week low of 262,000, giving evidence of labor market strength that could imply that possibility of rate hikes by the Federal Reserve remain on the table for this year.
At the same time, investors will digest the durable goods orders that measure demand for long-lasting manufactured goods. Analyst forecast a rise of 2.5% in what would be a sharp rebound from the prior 5.0% decline and its first increase in three months. The data also has implications for the Fed as the U.S. central bank gauges consumer demand for big-ticket items, with private-sector consumption as one of the key drivers for both growth and inflation.