The Thursday Market Minute
- Global stocks mixed, with modest gains in Asia and weakness in Europe, ahead of an ECB policy meeting and weekly U.S. jobless claims.
- ECB kept its three key rates on hold, but could hint at more monetary stimulus in order to address the strength of the euro.
- Weekly jobless claims tick higher, to 884,000, while Senate Republican lawmakers attempt to push through a $500 billion coronavirus stimulus bill.
- Oil prices edge lower ahead of the Energy Department's weekly inventory report, with Brent crude sliding towards $40 a barrel.
- U.S. equity futures suggest a modestly firmer open on Wall Street following the ECB rate decision and weekly jobless claims data at 8:30 am Eastern time.
U.S. equity futures edged higher Thursday as investors looked to results from a European Central Bank policy meeting that could provide a boost to the dollar and eyed weekly jobless claims data that failed to show a marked improvement in the country's labor market.
The ECB made no changes to its three key interest rates -- all of which currently sit at record lows -- following its two-day meeting in Frankfurt, with President Christine Lagarde taking question from the media at 8:30 am Eastern time. The ECB also left its quantitative easing program, which purchases government, agency and corporate bonds, at €1.35 billion.
Analysts were not expecting any changes to the Bank's rate policies, but new growth and inflation projections are likely to paint a grim picture for the region's near-term prospects, and a strong euro, which has gained 6% against the greenback since early June, has pushed inflation into negative territory. That likely means Lagarde will hint at fresh monetary stimulus, a move that could weaken the euro -- and strengthen the dollar -- heading into the open of trading on Thursday.
Weekly jobless claims data showed that 884,000 Americans filed for unemployment benefits by September 5, compared to a market estimate of 850,000. The total is well south of the record 6.9 million recorded in March, but remains stubbornly close to the 1 million mark despite improvements in the monthly non-farm payroll report for August.
With Senate Republicans likely to fail in their bid to advance an procedural vote later today on a $500 billion coronavirus stimulus package, Wall Street looks in little mood to extend risk heading into the start of trading.
Futures contracts tied to the Dow Jones Industrial Average suggest a modest 80 point gain while those linked to the S&P 500, which is down 2.9% for the month, indicate a 23 point advance.
Nasdaq Composite futures, meanwhile, suggest a 90 point gain after the tech-focused index lifted itself out of correction territory yesterday with a 2.7% gain, lead by a 7% rebound for Tesla (TSLA) - Get Report and a 4.3% jump for Microsoft (MSFT) - Get Report.
European stocks were similarly undecided in early trading in Frankfurt and London, with traders awaiting the ECB rate decision and digesting more news of a potential fallout in Brexit trade talks between Britain and Brussels after Prime Minister Boris Johnson's government said it would change some legislation to override a prior treaty agreement on the Northern Ireland border, a breach of international law.
The Stoxx 600 was marked 0.14% lower in Frankfurt, while the DAX gained 0.2%, with Britain's FTSE 100 marked 0.6% lower in the opening hours of trading.
The U.S. dollar index was marked 0.175% lower against a basket of six global currencies, including the euro, but that is likely to change when ECB President Lagarde speaks to the media at 7:30 am Eastern time.
Global oil prices continued to slide, despite the weaker dollar, ahead of the Energy Department's weekly inventory data release at 10:30 am Eastern time.
WTI contracts for October delivery, the U.S. benchmark, traded 61 cents higher from their Wednesday close in New York at $37.44 per barrel in early European dealing while Brent contracts for November, the new global benchmark, were seen 49 cents lower at $40.30 per barrel.
Overnight in Asia, Wall Street's tech-lead rebound boosted the Nikkei 225 in Tokyo, which closed 0.88% higher at 23,235.47 points, while the region-wide MSCI ex-Japan benchmark was seen 0.25% higher heading into the close of trading, although only South Korea and Australia ended the session in positive territory.