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Top 5 Things To Know In The Market On Thursday

EconomyJul 12, 2018 05:39AM ET
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© Reuters. Top 5 things to know today in financial markets - Here are the top five things you need to know in financial markets on Wednesday, July 12:

1. World Stocks Rebound After Latest Trade War Jolt

Global stocks recovered, with markets shaking off some of the trade jitters seen in the previous session, when fears of an escalation in the U.S.-China trade war jolted investor sentiment.

In Asia, shares closed mostly in positive territory, with Chinese markets leading gains in the region. Both the Shanghai Composite and the smaller-cap Shenzhen Composite rose more than 2%, largely making up Wednesday’s losses.

Elsewhere, European stock markets were slightly higher in mid-morning trade, with almost all sectors in positive territory. Among national indexes, Germany's export-heavy DAX inched up 0.3%, while Britain's FTSE tacked on 0.6%.

On Wall Street, U.S. stock futures pointed to a modestly positive opening. The blue-chip Dow futures were up 140 points, or around 0.6% at 5:39AM ET, the S&P 500 futures ticked up 12 points, or roughly 0.4%, while the tech-heavy Nasdaq 100 futures indicated a gain of 30 points, or about 0.4%.

Market focus is largely attuned to the next potential steps in the tit-for-tat trade dispute between the U.S. and China. Investors fear an escalating trade war between the world's two biggest economies could hit global growth and damage sentiment.

2. Dollar Rises To 6-Month High Vs. Yen

The dollar rose to fresh six-month highs against the yen, amid growing expectations that the Federal Reserve will hike interest rates two more times this year.

The greenback was 0.4% higher against the yen at 112.42 (USD/JPY), the strongest level since January 10, after gaining around 1% in the previous session, when upbeat U.S. economic data boosted confidence in the world's top economy.

The dollar's index (DXY) against a basket of six major currencies held firm near a one-and-a-half-week high of 94.56 reached overnight, trading at 94.50.

Meanwhile, in the bond market, U.S. Treasury prices edged lower, pushing yields higher across the curve, with the benchmark 10-year yield inching up to 2.86%.

Elsewhere, China's yuan had strengthened 0.3% overnight, partially recovering from a big slide the previous day.

3. U.S. Inflation Data Eyed

Thursday's calendar features the biggest economic data point of the week.

The Commerce Department will publish June inflation figures at 8:30AM ET, which should lend further support to the notion that inflation has returned to the Fed’s target.

Consumer prices are expected to have risen 0.2% last month and 2.9% over the prior year, according to estimates.

Excluding the cost of food and fuel, core inflation is projected to climb 2.3% on a year-over-year basis.

Data released Wednesday showed the biggest annual increase in 6-1/2 years in June U.S. producer prices, thanks to gains in the cost of services and motor vehicles.

The data reinforced expectations for two additional rate hikes by the Fed this year.

4. Oil Recovers After Worst Daily Loss In 2 Years

Brent crude rose more than $1, recouping some ground after its biggest one-day drop in two years in the previous session on news that Libya would resume oil exports.

The rally received an extra boost from the International Energy Agency (IEA), which said the world's oil supply cushion "might be stretched to the limit" due to production losses.

Brent crude was up $1.48, or 2%, to $74.87 a barrel, after plunging almost 7% on Wednesday.

U.S. West Texas Intermediate crude added 64 cents, or 0.9%, to $71.02, after falling 5% the previous session.

5. Trump Continues His European Tour

U.S. President Donald Trump flies into Britain for talks with the leader of the United States' closest ally in Europe, and tea with Queen Elizabeth, set against a backdrop of protests and what he described as the country's turmoil over Brexit.

Fresh from a NATO summit where Trump chided Germany and other European nations for failing to contribute enough to defense spending, British Prime Minister Theresa May is hoping his trip will boost the close ties between their two nations and help forge a future free trade deal.

May will host a black-tie dinner for Trump that will be attended by senior ministers and about 100 business leaders, including the likes of Blackstone (NYSE:BX), Blackrock (NYSE:BLK), Diageo (LON:DGE), McLaren and Arup.

Top 5 Things To Know In The Market On Thursday

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kingsley okechukwu
kingsley okechukwu Jul 12, 2018 6:15AM ET
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What will be its effect on usd and gbp pairs ?
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Lester Hines
Lester Hines Jul 12, 2018 6:15AM ET
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It depends on trumps rhetoric and if the market beleives it or if he plays nice dollar strengthen if maket believes. If not then gbp will be bolstered
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