Investing.com - Here are the top five things you need to know in financial markets on Thursday, June 29:
1. Hawkish bets lift euro, pound to new highs
The euro and pound extended strong gains from the prior session to reach new highs as investors priced in tighter monetary policy in Europe, following hawkish comments made by key central bank officials.
The euro was up around 0.3% against the dollar at 1.1416 in early New York trade, after hitting 1.1435 overnight, its highest level since May 2016.
European Central Bank President Mario Draghi sparked the euro's rally on Tuesday, when he hinted that the ECB could soon start to unwind its massive stimulus program.
Meanwhile, the pound climbed above the 1.30-level for the first time in five weeks against the greenback, touching a daily peak of 1.3007 before pulling back to 1.2990, up about 0.5% on the day.
Sterling added to gains after Bank of England chief economist Andy Haldane said policymakers need to look seriously at raising interest rates. The hawkish remarks came after Governor Mark Carney said on Wednesday that the central bank is likely to need to raise interest rates as the British economy comes closer to operating at full capacity.
2. Dollar slides to lowest level since October
The dollar extended its recent decline to the lowest level since October as investors awaited further signs of the Federal Reserve's likely rate hike trajectory through the end of the year.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.3% at 95.49. It fell to its lowest since October 3 at 95.43 earlier.
Traders will keep an eye out on a final reading of U.S. first-quarter economic growth due at 8:30AM ET (1230GMT) for further indications on the health of the world's biggest economy.
Fed Chair Janet Yellen reiterated earlier this week that the U.S. central bank would continue to gradually raise interest rates later in the year, though a batch of mixed economic data recently has had investors wondering whether it would be able to stay on its planned tightening path.
3. U.S. banks set to rally after passing Fed stress tests
Several big Wall Street banks announced significant increases in their plans to return capital to shareholders after passing the Federal Reserve's annual stress test.
Citigroup (NYSE:C) was the highlight in pre-market action, jumping roughly 3% after doubling its quarterly dividend to 32 cents per common share and announcing a common stock repurchase program of up to $15.6 billion late on Wednesday.
JPMorgan Chase (NYSE:JPM) was up around 2% after saying it would raise its quarterly dividend by 6 cents to 56 cents a share, effective the third quarter of 2017. The financial giant also said it has authorized share buybacks of up to $19.4 billion between July 1 and June 30 next year.
Bank of America (NYSE:BAC) also rallied after announcing plans to increase its quarterly common stock dividend to 12 cents a share, a 60% increase, beginning in the third quarter of 2017. The bank's board also authorized a $12 billion repurchase in common stock from July 1 through June 30, 2018.
Meanwhile, Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and Wells Fargo (NYSE:WFC) were all in the green ahead of the opening bell.
4. Global stocks mixed
Global stock markets were mixed as investors continued to digest hawkish comments from key central bank officials in Europe and announcement of major buybacks plans for some of the biggest U.S. banks.
On Wall Street, the blue-chip Dow futures rose 14 points, or less than 0.1%, at the open, the S&P 500 futures ticked up 2 points, or around 0.1%, while the tech-heavy Nasdaq 100 futures pointed to a loss of 9 points, or roughly 0.2%.
In Europe, stocks were mixed, as shares of banks and basic materials companies rose, but key regional benchmarks failed to follow them higher.
Earlier, Asian shares ended mostly in positive territory, with finance stocks broadly leading gains.
5. Oil prices rise for 6th day in a row
Oil prices extended gains into a sixth session to hit the strongest level in two weeks after U.S. government data revealed the biggest weekly decline in domestic crude production in almost a year.
U.S. crude was at $45.12 a barrel, up 38 cents, or around 0.9%, while Brent oil tacked on 34 cents, or 0.7%, to $47.88 a barrel.
Data from the U.S. Energy Information Administration on Wednesday showed that total domestic crude production fell by 100,000 barrels a day to 9.25 million barrels a day for the week ended June 23. That was the biggest decline in weekly output since July 2016.