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Top 5 things to know in the market on Thursday

EconomySep 07, 2017 05:25AM 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 Thursday, September 7:

1. All eyes on ECB, Draghi for taper clues

The main focus of the day is the European Central Bank's latest interest rate decision due at 1145GMT (7:45AM ET).

Most of the focus will be on President Mario Draghi's press conference 45 minutes after the announcement, as investors look for more clues on when and how the ECB could start unwinding its massive quantitative easing program.

While Draghi is expected to lay the groundwork for stimulus reduction, most investors appear to believe he will hold off until October to make any major announcements.

Announcing new staff forecasts, policymakers will likely upgrade the ECB's growth outlook and reduce inflation projections but only slightly.

Having already expressed concern about the rise of the euro in July, policymakers may also repeat their warning about the currency moving too quick.

The euro edged up 0.4% against the dollar to 1.1970, moving back toward last week's high of 1.2070, its strongest level since January 2015.

2. Hurricane Irma barrels toward Florida

Traders remained wary of Hurricane Irma, ranked as one of the five most powerful Atlantic hurricanes in the last 80 years. The Category 5 hurricane battered Puerto Rico and devastated a chain of small Caribbean islands late on Wednesday.

The storm system is forecast to hit Florida by Sunday afternoon, a prospect that has roiled orange juice and gasoline futures markets as well as shares of insurance providers.

Some believe Irma can turn into the most expensive hurricane in U.S. history, with Barclays (LON:BARC) estimating insured losses in a worst-case scenario at a whopping $130 billion.

Adding to concerns, there are two more tropical storms on Irma's heels.

Jose, heading for the Caribbean, strengthened to a hurricane and could become a major Category 3 storm by Friday, while Katia churned in the Gulf of Mexico, threatening to come ashore in Mexico.

3. Cohn out as possible Fed chief

President Donald Trump has soured on nominating his top economic adviser Gary Cohn to lead the Federal Reserve, according to sources close to the White House and an administration official.

Two sources said Trump remained upset with Cohn, a former Goldman Sachs (NYSE:GS) president, for criticizing his response to the violence sparked by a white supremacist rally in Charlottesville, Virginia, last month.

Instead, sources said Trump was "considering several candidates" to head up the U.S. central bank.

Fed Chair Janet Yellen's term expires in February. Fed Vice Chair Stanley Fischer unexpectedly resigned on Wednesday, saying he will step down from his position in mid-October.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.3% at 91.91.

4. Global stocks boosted by Trump's surprise debt ceiling deal

Global stock markets were mostly higher, as appetite for riskier assets improved after U.S. President Donald Trump and congressional leaders unexpectedly agreed to raise the government debt limit until December.

The positive development was seen as eliminating the near-term risk of a government shutdown.

Stock markets across Asia closed on a relatively mixed to positive note, with benchmarks in Tokyo and Seoul closing higher, while markets in mainland China slumped.

In Europe, shares inched broadly higher, with Germany's DAX up around 0.6% in mid-morning trade.

Meanwhile, U.S. stock futures pointed to a modestly lower open on Wall Street, with the major benchmarks down around 0.1%.

5. Weekly oil supply data on tap

The U.S. Energy Information Administration will release its official weekly oil supplies report at 11:00AM ET (1500GMT). Analysts expect crude oil inventories rose by around 4.0 million barrels at the end of last week.

Meanwhile, gasoline supplies are seen decreasing by 5.0 million barrels and distillates are forecast to fall 3.0 million barrels.

After markets closed Wednesday, the American Petroleum Institute said that U.S. oil inventories rose by about 2.8 million barrels in the week ended September 1. The API report also showed a drop of 2.5 million barrels in gasoline stocks, while distillate stocks fell by 600,000 barrels.

The data was published a day later than usual due to Monday’s Labor Day holiday.

There are often sharp divergences between the API estimates and the official figures from EIA.

U.S. West Texas Intermediate (WTI) crude futures were a shade higher at $49.22 barrel, within sight of a four-week high reached in the previous session.

Brent crude futures, the benchmark for oil prices outside the U.S., added 29 cents to touch a more than three-month peak of $54.49 a barrel.

Top 5 things to know in the market on Thursday

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Sep 07, 2017 8:20AM ET
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No mention of N. Korea. Well that didn't go away
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Al Amin Mazumder
Al Amin Mazumder Sep 07, 2017 7:05AM ET
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Excellent writing
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