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Day Ahead: Top 3 Things to Watch

Published 06/05/2018, 04:35 PM
Updated 06/05/2018, 04:35 PM
© Reuters.  What to watch out for in tomorrow's session

© Reuters. What to watch out for in tomorrow's session

Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow

1. Trade, Labor Market Data on Tap

The release of U.S. trade data could likely garner special attention amid concerns that a global trade war could be brewing as recent talks between the U.S.-China yielded limited progress.

The Commerce Department at 08:30am ET is expected to report the trade gap widened to $50.00 billion in April from $49.00 billion in the prior month. Export and import data will also likely attract attention.

In latest round of U.S.-China trade talks, Chinese negotiations proposed to buy nearly $70 billion worth of U.S. agriculture productions if the United States agreed to backtrack from tariffs, the Wall Street Journal reported Tuesday, citing sources.

First-quarter Nonfarm productivity data due 08:30am is forecast to show an unchanged reading of 0.7% for the first three months of the year. While first-quarter unit labor costs are expected show 2.7% growth.

The report comes on the back of a strong nonfarm payrolls report released last week showing wage growth topped expectations.

The dollar fell Wednesday against its rivals after EUR/USD staged a late rally following a report that the European Central Bank could announce at its meeting next week, a possible date, when it will cease asset purchases.

2. U.S. Crude Supplies to Fall for Second-Straight Week?

Inventory data from the Energy Information Administration (EIA) on Wednesday is expected to show a second-straight weekly draw in U.S. crude stockpiles.

Analysts forecast crude inventories fell by about 1.824 million barrels in the week ended June 3.

Crude oil prices rebounded on Tuesday shrugging off a report that the U.S. government had asked major oil producers to increase oil output.

Crude oil futures settled 1.6% higher at $65.52 a barrel.

3. Tumble in Airlines, Potential Fallout From Tesla Meeting in Focus

Airline stocks fell sharply Tuesday after Southwest Airlines Company (NYSE:LUV) said it expected a key revenue metric to drop by 3% in the second quarter of the year amid reduced advertising following a death of a passenger in April.

Other Airlines tumbled on the news as both Delta Air Lines Inc (NYSE:DAL) and United Continental Holdings Inc (NYSE:UAL) closed 0.94%, while American Airlines Group (NASDAQ:AAL) fell 1.52%.

Market participants are also likely to monitor whether the annual Tesla Inc (NASDAQ:TSLA) shareholder meeting due Tuesday 5.30pm ET concluded with any market-moving news amid a vote to decide whether Elon Musk should retain the title of chairman.

Focus will also be centered around any update on the progress of Tesla's Model 3 production.

In its first-quarter results in April, Tesla said that it had reached a production level of 2,020 Model 3s per week, short of its 2,500-per-week goal.

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