European stocks are likely to open higher on Thursday despite hawkish comments from a top U.S. Federal Reserve official.
Asian markets held steady as investors reacted to mixed U.S. economic data and comments from Fed Vice Chair Richard Clarida that the U.S. central bank is on track for liftoff in interest rates in early 2023.
Clarida’s remarks helped U.S. yields and the dollar, while gold dipped after a measure of U.S. services industry activity jumped to a record high in July.
Oil edged up slightly after a three-day slump exacerbated by the coronavirus resurgence and data showing an unexpected in crude inventories last week.
Beijing’s regulatory curbs continue to dominate the agenda, with state media arguing that the country should stop handing out tax breaks to gaming companies.
On the CoVID-19 front, the global caseload has topped the 200 million mark due to disparities in vaccination rates around the world. Israel reinstated some virus restrictions to avoid a full lockdown.
The World Health Organization is calling for a moratorium on COVID-19 booster shots until at least the end of September to enable at least 10 percent of the population of every country to be vaccinated.
White House press secretary Jen Psaki told reporters it is a ‘false choice’ to demand wealthy nations halt third doses in order to supply poor countries.
The monetary policy announcement and the quarterly economic forecasts are due from the Bank of England later in the session, headlining a busy day for the European economic news.
The central bank is set to keep its key interest rate unchanged at a record low of 0.10 percent and the existing quantitative easing at GBP 895 billion. The announcement is due at 7.00 am ET.
Markets expect the BoE to avoid any fresh hints on the timing of future policy tightening while the bank is likely to lift its inflation projections citing supply chain disruptions and energy base effects.
Across the Atlantic, reports on initial jobless claims and the U.S. trade deficit are likely to attract some attention later today, although trading activity may be somewhat subdued ahead of the closely watched monthly jobs report due on Friday.
Economists currently expect the report to show employment surged up by 880,000 jobs in July after spiking by 850,000 jobs in June. The unemployment rate is expected to dip to 5.7 percent from 5.9 percent.
U.S. stocks ended broadly lower overnight, as private sector employment numbers came in below expectations, Clarida issued a hawkish forecast and General Motors reported second quarter earnings that missed expectations.
The Dow dipped 0.9 percent and the S&P 500 shed half a percent while the tech-heavy Nasdaq Composite edged up 0.1 percent.
European stocks reached record highs on Wednesday, as optimism over the economic recovery and earnings growth outweighed concerns over the spread of the Delta variant in China.
The pan-European Stoxx 600 Index gained 0.6 percent. The German DAX climbed 0.9 percent while France’s CAC 40 index and the U.K.’s FTSE 100 both rose about 0.3 percent.
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