Top 5 Things to Know in the Market on Thursday
1. Oil swings as OPEC seems set to agree on 9-month extension
Oil prices swung between sharp gains and losses in volatile trade on Thursday, after Saudi Arabia’s energy minister indicated that OPEC will extend its current output-cut deal for a further nine months.
Prices fell to the lowest levels of the session after Khalid al-Falih said OPEC and non-OPEC producers are likely to rule on extending production cuts for nine months, but keep them at the same level.
Speaking ahead of a meeting of oil ministers from OPEC and other major producing countries in Vienna on Thursday, the Saudi energy minister added that the consensus is that deeper cuts are not needed now.
U.S. crude was at $50.98 a barrel by 5:45AM ET (0945GMT), down 38 cents, or around 0.8%. The U.S. benchmark was up more than 1% to its strongest since April 19 at $52.00 in overnight trade.
Meanwhile, Brent lost 31 cents to $53.65, pulling back from a session high of $54.67.
2. Rate hike odds drop after Fed signals gradual tightening
Market players scaled back bets on two more rate increases from the Federal Reserve by the end of the year following somewhat dovish minutes which signaled a cautious approach to future rate hikes.
Futures traders are currently pricing in around an 77% chance of a hike at the Fed’s June meeting, according to Investing.com’s Fed Rate Monitor Tool, while odds for a second rate hike by December were at about 40%.
Minutes from the Fed’s last policy meeting showed policymakers agreed they should hold off on raising interest rates until it was clear a recent U.S. economic slowdown was temporary, though most said a hike was coming soon. The minutes also showed that policymakers favored a gradual reduction of its massive $4.5 trillion balance sheet.
The dollar index, which tracks the greenback against a basket of six major rivals, was up 0.1% at 97.05 in New York morning trade, keeping distance from six-and-a-half-month lows of 96.70 touched earlier in the week.
On the data front, Thursday’s calendar features a report on weekly jobless claims at 8:30AM ET (12:30GMT), as well as an advanced reading on international trade figures.
3. Global stocks move higher after Fed minutes, OPEC in focus
Global stock markets were mostly higher on Thursday, as investors parsed the latest minutes from the Federal Reserve and major oil producers gathered for a closely-watched meeting in Vienna.
Asian shares scaled two-year highs, with Japan’s Nikkei ending up around 0.3%, while China’s Shanghai Composite surged about 1.5%.
In Europe, stocks across the continent inched back toward the highest level in 21 months, with Germany’s DAX rising 0.1% in mid-morning trade, while London’s FTSE 100 gained 0.1%.
On Wall Street, the blue-chip Dow futures pointed to an increase of 77 points, or around 0.4% at the open, the S&P 500 futures ticked up 7 points, while the tech-heavy Nasdaq 100 futures advanced 19 points.
Most earnings are now out of the way, but retailers such as, Sears Holdings (NASDAQ:SHLD), Abercrombie & Fitch (NYSE:ANF), Dollar Tree (NASDAQ:DLTR), Signet Jewelers (NYSE:SIG), Burlington Stores (NYSE:BURL), Best Buy (NYSE:BBY) and Costco (NASDAQ:COST), will be among companies reporting earnings Thursday.
4. U.K. economic growth revised lower in first quarter
Britain’s economy slowed more than previously thought in the first three months of 2017, expanding at the weakest pace in a year as rising inflation took a toll on household spending, official figures showed on Thursday.
Gross domestic product grew by just 0.2% compared with an earlier estimate of 0.3%, the ONS said. Year-on-year growth in early 2017 fell to 2.0% from an initial estimate of 2.1% growth. Most economists had forecast the rate of growth would stay unchanged.
Sterling was changing hands at 1.2955 against the dollar, down from around 1.2995 earlier (GBP/USD). Against the euro, sterling was at 0.8661, from around 0.8651 earlier (EUR/GBP).
5. Bitcoin rally keeps going; tops $2,600
Bitcoin cleared the $2,600-level for the first time on Thursday to hit yet another all-time high, as a monster rally continues amid bullish noises around the future of the cryptocurrency.
Prices of the digital currency rose to a daily peak of $2,694.99 on the New York-based itBit exchange at one point, its highest on record. Other big exchanges such as Poloniex, BTC-e, Bitfinex, Kraken and BitStamp also showed the cryptocurrency rising above the $2,600-level early Thursday.