Morning Markets: Tech stocks rebound as crude sells off
Watchlist
- Eurozone: Retail PMI (0810 GMT)
- Greece: Labour force survey (0900 GMT)
- Eurozone: ECB minutes of last monetary policy discussions (1130 GMT)
- US: ADP national employment report (1215 GMT)
- US: International trade in goods and services (1230 GMT)
- US: Weekly jobless claims (1230 GMT)
- Canada: International merchandise trade (1230 GMT)
- US: ISM non-manufacturing report on business (1400 GMT)
- US: EIA weekly petroleum status report, incl. crude oil stocks (1500 GMT)
The Federal Open Market Committee's Wednesday statement showed the central bank's willingness to unwind its balance sheet within months, but markets were little moved by the widely anticipated decision.
Crude oil sold off dramatically in the late US session with both Brent and WTI variants plunging by over 3% before rebounding somewhat in Asia. The selloff helped to take Asian bourses lower with the Nikkei closing down 0.44% and the Hang Seng 0.07% lower.
On the political front, US ambassador to the United Nations Nikki Haley said that Monday's North Korean ICBM launch means that Pyongyang is "quickly closing off the possibility of a diplomatic solution," adding that the US remains prepared to use military force to defend its interests and allies in the region.
Meanwhile, president Trump is preparing for a major speech in Poland that many feel reflects his desire to realign the US with the populist, immigration-sceptical Warsaw government at the expense of its traditional allegiance to Germany.
Wednesday's sessions saw the FAAMG stocks – Facebook, Amazon, Apple, Microsoft, and Alphabet/Google – post gains in what Saxo Bank head of equity strategy Peter Garnry termed a crucial session in light of recent tech-sector declines.
Today's data calendar sees the US out with ADP employment figures at 1215 GMT while jobless claims are set to follow at 1230 GMT. The latest minutes from the European Central Bank are due out at 1130 GMT.
Market signals
Asian session
- Wall St was a little subdued on Wednesday, with some traders extending July 4 break
- Markets are waiting for the release of US nonfarm payrolls data for June
- Oil recovered some losses after slumping toward $45/barrel as stockpiles declined.
- West Texas Intermediate crude futures rose 0.8% to $45.61/b
- Minutes from the Fed show differences over central bank’s balance sheet
- Australia had a record trade surplus of $A2.47bn in May, up from just $A555m in April
- Today's ECB minutes will be scrutinised for any departure from the usual dovish tone
- Gold was largely flat at $1,224.82/oz after two days of gains
- Asia shares wobbled over a lack of consensus on the future pace of US rate hikes
- The Nikkei was down 0.53% at 0505 GMT and the Hang Seng fell 0.25%
- The ASX 200 and Kospi were flat and the Shanghai Composite gained 0.17%
Forex ahead
- The USD Index was little changed, after Wednesday’s 0.1% gain.
- JPY climbed to 113.20 per dollar and NZD slipped 0.2%
- AUD fell less than 0.1%, despite positive news of a hefty trade surplus
- The euro pulled back slightly to $1.1337 ahead of the European bell
From the Floor
Isolated. “It looks like we will see a [G20] summit where Trump is increasingly isolated on the global scene,” says Hardy.
The EV era. “The automobile industry is the new battlefield. Volvo was out yesterday announcing the death of the combustion engine,” says Garnry.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
In opinion
1...2...3
Eurozone retail sales showed growth in May for the fifth month in a row, and the June release should reveal more good news of further modest growth for this key indicator, says James Picerno.
Monetary policy discord
Central bankers from the Fed, European Central Bank, and the Bank of Japan, are not singing from the same song sheet when it comes to loose monetary policy, laments Max McKegg.
Crude fallout
Energy shares on the ASX will take a hit from another slide in crude prices, says the Sydney-based team at Saxo Capital Markets Australia.
Recession reminder
Though we have no intention of calling a peak in the stock market, we see a 60% chance of recession in the next 18 months, writes Steen Jakobsen.
Bund breakthrough?
The 10-year German yield has doubled in less than five trading sessions, threatening once again to break through the 0.50% mark – is this its time to break free? asks Michael Boye.
Russian oil and gas
Russia's oil output flattened in June, with exports down slightly year-on-year, as the country shifts its focus to ramping up gas production and exports, writes Nadia Kazakova.
Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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