The Thursday Market Minute

  • Global stocks steady, dollar rallies, as investors return to Asia risk markets.
  • China's central bank fixes yuan at lowest level since August 2017.
  • Oil recovers after worst single-day session in more than two years, but demand questions remain amid trade war concerns.
  • European stocks post modest gains as euro weakens; Sky shares surge after improved bid from Comcast amid battle for Fox with Disney.
  • U.S. equity futures suggest a stronger open on Wall Street, with a 105-point gain the Dow; benchmark 10-year Treasury yields hold at 2.856%.

Market Snapshot

Global stocks regained some poise in overnight trading, even as the U.S. dollar continued to find favor among investors still rattled by trade war rhetoric and President Donald Trump's haranguing of NATO allies in Brussels, setting up the potential for a solid opening on Wall Street.

The dollar index, which tracks the greenback against a basket of six global currencies, gained 0.6% in overnight trading to change hands at 94.71, a ten-day high, as investors retreated from a softer euro and a weaker Chinese yuan amid defensive trading flows.

The yuan, in fact, was fixed at close to the lowest rate in a year by the People's Bank of China today, suggesting authorities might be quietly using the currency to offset the impact of both the $34 billion in announced U.S. tariffs and the list of $200 in China-made goods the White House may hit with fresh levels later this year. 

With the dollar's gains pushing the regional currencies lower, particularly the yen, stocks in Asia were able to book decent gains, with the Nikkei 225 in Japan rising 1.17% to close at 22,187.96 points while the region-wide MSIC Asia ex-Japan index gained 0.54%. The weaker yuan ignited a bounceback in China stocks, too, with the bluechip CSI300 leaping 2.45% while the Shanghai Composite rose 2.35%.

Stocks and commodities recover after latest trade war jolt as investors re-risk their portfolios. Bonds a tad weaker w/ US 10y yields at 2.86%, 10y Bund yields at 0.36%. Dollar stands tall, hits 6mth high vs Yen. Turkey Lira bounces from all-time low, Copper rebounds from 1y low. pic.twitter.com/ZRkN1Y1UlD

— Holger Zschaepitz (@Schuldensuehner) July 12, 2018

Early indications from U.S. equity futures suggest a positive opening for Wall Street, following last night's sharp trade war-led declines, with contracts tied to the Dow Jones Industrial Average suggesting a 200 point gain and those linked to the S&P 500 pointing to a 14.1 point advance for the broader benchmark. 

European stocks were also higher, owing in part to the softer euro, which fell to 1.1675 against the U.S. dollar following a series of disappointing data reads for the region's economy, with the Stoxx 600 rising 0.69% in the opening 90 minutes of trading to 383.95 points.

Sky plc (SKYAY) shares were a notable early market mover, rising more than 2.9% at the opening bell to £15.238 each after Comcast Corp. (CMCSA) improved its bid for Europe's biggest pay-TV group to £14.75 a share last night, topping the last bid £14 per share bid yesterday from 21st Century Fox Corp. (FOXA) .

Wonder what Disney (DIS) thinks of this battle. Comcast is a holding in Jim Cramer's Action Alerts PLUS.

Global oil prices also rebounded after the biggest one-day slide in more than two years yesterday, with investors snapping up cheap crude ahead of today's reading of domestic stockpiles from the Energy Information Administration.

Brent crude contracts for September delivery, the global benchmark, were seen $1.05 higher from Wednesday's New York close and changing hands at $74.45 in early European trading. WTI contracts for August delivery, which are more tightly linked to U.S. gasoline prices, were seen 73 cents higher at $71.11 per barrel.