Investing.com - Here are the top five things you need to know in financial markets on Thursday, December 1:
1. Oil continues to rally post-OPEC accord, struggles to break $50
A powerful rally on oil prices continued on Thursday, as investors took stock of an agreement by the Organization of the Petroleum Exporting Countries (OPEC) to cut oil production.
Oil surged higher on Wednesday after OPEC agreed on its first production cut since 2008, aimed at reducing a global supply overhang that has seen prices more than halve since mid-2014.
Crude prices continued to rally more than 1% on Thursday despite skepticism by analysts that higher prices would eventually translate to increased production from other producers outside the agreement, particularly U.S. shale drillers.
U.S. crude oil futures climbed 1.11% to $49.99 at 6:00AM ET (11:00GMT), while Brent oil jumped 1.37% to $52.55.
2. China manufacturing sector expands at fastest pace in 2 years
China’s official purchasing managers' index (PMI) rose to 51.7 in November from previous month's 51.2 and above the 50-point mark that separates growth from contraction on a monthly basis.
The reading was at its highest level since April 2012 and surprised analysts who had expected the number to drop to 51.0.
Still, some analysts warned that the positive read from the November data could be short-lived as the results were supported by government infrastructure spending and a housing boom that looked set to run out of steam.
3. U.S. manufacturing activity and jobless claims on the docket
The U.S. will take measure of activity in its own factory sector with all eyes on the ISM manufacturing PMI for November at 10:00AM ET (15:00GMT). Analysts are looking for a slight increase to 52.2, from the prior month’s reading of 51.9.
Also on the economic calendar Thursday at 8:30AM ET (13:30GMT), weekly jobless claims will be in the spotlight with particular attention ahead of Friday’s employment report.
Friday’s data is expected to confirm a solid U.S. labor market and cement expectations for the Federal Reserve (Fed) to proceed with policy normalization at the December 13-14 meeting.
4. Dollar loses steam after hitting 9 ½ month high against yen
The greenback strengthened broadly on Wednesday after the Organization of the Petroleum Exporting Countries reached an agreement on an oil output cut aimed at tackling global oversupply and shoring up prices.
Furthermore, Steven Mnuchin, President-elect Donald Trump's pick to lead the U.S. Treasury, gave no hint of any unease over the strong dollar in his first remarks since being named for the job, giving traders fresh impetus to buy the U.S. currency.
In early Asian trade, the USD/JPY hit a nine-and-a-half month high, before pulling back.
In European mid-day trade, the dollar remained moderately lower against the other major currencies on Thursday, as market participants waited to evaluate the day’s data.
As of 6:03AM ET (11:03GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.32% at 101.30, still close to recent 14-year highs of 102.12.
5. Global stocks mixed after OPEC deal, China PMI with U.S. data ahead
U.S. stock futures pointed to a slightly lower open on Thursday after the S&P posted its best month since July a day earlier. At 5:55AM ET (GMT), the blue-chip Dow futures slipped 0.04%, S&P 500 futures traded down 0.15% and the Nasdaq 100 futures gave up 0.20%.
Elsewhere, European stocks traded lower on Thursday, despite a rally in oil prices as political uncertainty in Italy continued to weigh on market sentiment.
Earlier, Japan's benchmark index surged more than 2 percent on Thursday before retracing slightly as regional manufacturing surveys led by China beat expectations and on upbeat views a day after OPEC reached its first deal since 2008 to cut oil production. The Nikkei 225 led the gains, closing 1.12% higher.