Investing.com - Here are the top five things you need to know in financial markets on Thursday, July 5:
1. Europe Gets A Boost As Trump Offers "Zero Tariffs" On Autos
The U.S. ambassador to Germany has told German car bosses that President Donald Trump would suspend threats to impose tariffs on cars imported from the European Union if the bloc lifted duties on U.S. cars, a German newspaper reported.
Handelsblatt said Ambassador Richard Grenell told executives from Daimler (DE:DAIGn), Volkswagen (DE:VOWG_p) and BMW (DE:BMWG) during a meeting, which took place at the U.S. embassy in Berlin on Wednesday, that in exchange Trump wanted the EU to annul duties on U.S. cars imported to the bloc.
Trump threatened last month to impose a 20% import tariff on all EU-assembled vehicles, which could upend the industry's current business model for selling cars in the U.S.
European stocks were higher, with Germany's auto-heavy DAX, which has been the most sensitive to trade tensions, managed a 1.2% gain.
The Stoxx Europe 600 Automobiles and Parts index (SXAP), the sector benchmark, rose more than 3%, the biggest one-day gain in 18 months, while Germany's biggest carmakers posted solid gains in trading in Frankfurt.
2. China Stocks Slide to Two-Year Low On Eve Of U.S. Tariff Deadline
Chinese shares led losses in Asia, with financial markets in the region jittery before a U.S. deadline to impose tariffs on Chinese imports just a day away.
The Shanghai Composite closed down 0.9%, marking its third-straight losing session, while the tech-heavy China Shenzhen ChiNext Composite fell 2.2%, after logging a 2.6% decline on Wednesday.
Markets are on edge ahead of Friday, when U.S. tariffs on $34 billion worth of Chinese products - and retaliatory Chinese tariffs on U.S. goods of the same value - are expected to kick in.
Due to the time difference, duties imposed by Beijing would likely take effect before Washington's tariffs on Friday. China's finance ministry, however, has said that it will "absolutely not" fire the first shot in its trade spat with the U.S.
3. Dow Futures Rise 150 Points
Wall Street futures point to solid opening bell gains, as hopes over a softening in U.S. trade rhetoric lifted sentiment among traders returning from the Fourth of July holiday.
At 5:45AM ET, the blue-chip Dow futures were up 150 points, or around 0.6%, the S&P 500 futures rose 17 points, or almost 0.6%, while the tech-heavy Nasdaq 100 futures indicated a gain of 44 points, or roughly 0.6%.
Markets stateside were closed on Wednesday because of the Independence Day holiday.
There are no major earnings scheduled for today.
4. Fed Minutes, U.S. Data On Tap
Investors are awaiting the publication of minutes from the Federal Reserve's June meeting at 2:00PM ET, for further clues into the outlook for monetary policy.
The U.S. central bank raised interest rates as widely expected following its meeting on June 13 - its second rate increase of the year - and took a slightly more hawkish policy tone in signaling two additional rate hikes by year-end.
Besides the Fed, market players will also focus on a fresh batch of U.S. economic data to gauge the health of the world's largest economy.
The highlight of Thursday's economic calendar will be the ADP jobs report for June at 8:15AM ET, which is often seen as a warmup act for the big Friday government nonfarm payrolls report.
An ISM survey on service sector activity is due at 10AM ET.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was a shade lower at around the 94.10-level, its weakest level since June 26.
5. Trump Turns Up Pressure On OPEC; EIA Data Ahead
Oil prices eased slightly after U.S. President Donald Trump sent a tweet urging OPEC to reduce prices for crude.
Trump late on Wednesday said the Organization of Petroleum Exporting Countries (OPEC) producer cartel was driving up fuel prices.
Meanwhile, supply data from the Energy Information Administration will be released at 11:00AM ET, a day later than usual because of Wednesday's Independence Day holiday, amid forecasts for an oil-stock drop of 5.2 million barrels.
The data will also offer fresh indications on how fast domestic output levels continue to rise. U.S. crude production - driven by shale extraction - is currently at an all-time high of 10.9 million barrels per day (bpd).
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 4.5 million barrels last week.
U.S. West Texas Intermediate crude futures were 22 cents higher at $74.36 per barrel, while Brent crude oil futures were at $78.07 per barrel, down 18 cents from their last close.