Awaiting for more easing by European Central Bank : 10-03-2016 by IFC Markets
US stock market advanced on Wednesday as rebounding oil buoyed investor confidence. The dollar weakened, the live dollar index shows the ICE US Dollar index edged down 0.1% to 97.1430. The Dow Jones Industrial Average closed 0.2% higher at 17000.36. Chevron was the best performer among Dow components as it rallied 4.6%. Chesapeake Energy shares jumped 7.7%, Devon Energy gained 6.8%. The S&P 500 rose 0.5% to 1989.26. Nine out of ten main sectors ended higher with energy and technical stocks leading the gainers, up 1.5% and 1% respectively. The energy sector managed to record a 0.7% gain year-to-date. Telecommunications stocks ended 0.3% lower. The Nasdaq Composite index advanced 0.6% to 4674.38. In economic data wholesale inventories increased 0.3% in January from an unchanged reading for December, with inventories-to-sales ratio hitting the highest level since April 2009. Today at 14:30 CET Initial Jobless Claims and Continuing Claims will be released in US. The tentative outlook is positive. At 16:30 CET Natural Gas Storage Change will be released by the Energy Information Agency. At 20:00 CET February Federal Budget Statement will be released.
European stocks closed higher on Wednesday ahead of the European Central Bank meeting today as rising oil lifted commodity stocks. The euro was little changed trading at $1.1005 late Wednesday with traders awaiting for the ECB decision on additional stimulus measures to boost sluggish euro-zone economy and fight low inflation. The ECB is expected to lower the deposit rate by 10 basis points to negative 0.4% and expand its 1.1 trillion euro asset purchase program. French bank Societe Generale said it expects ECB will cut deposit rates by 20 basis points and extend its bond buying program by one year. Investors are wary though that the ECB measures may fall short of expectations like in December which may result in strengthening of the shared currency. The Stoxx Europe 600 index ended 0.5% higher. Tullow Oil jumped 3.5% rebounding after a UBS ratings downgrade to neutral from buy. Germany’s DAX 30 gained 0.3% to 9723.09. Volkswagen shares ended 0.9% higher paring earlier losses after news the US Justice Department is expanding its investigation of the company over emissions cheating. France’s CAC 40 added 0.5%. Today at 13:45 CET European Central Bank interest rate decision will be announced. And at 14:30 CET ECB press conference will begin.
Chinese stocks are falling today with Shanghai Composite Index down 2% after report the annual consumer inflation rose more than expected, recording a 2.3% increase in February from January's 1.8%. Nikkei rose 1.3% today as rising oil bolstered risk appetite contributing to weaker yen.
The Reserve Bank of New Zealand unexpectedly cut benchmark rates by 25 basis points to 2.25% and indicated that more cuts might be coming. The New Zealand dollar fell over 1% following the RBNZ's rate cut.
Oil futures prices are edging lower today with investors’ focus shifting back to continued crude output oversupply. May Brent crude rose 3.6% to $41.07 a barrel on London’s ICE futures exchange on Wednesday supported by a big US gasoline inventory drawdown though country’s crude stockpiles hit three-month high.
Gold is retreating today for a third session in a row as traders take profits after recent gains and demand for safe haven metal declined with increasing risk appetite ahead of European Central Bank expected decision to ease policy.