Global stock markets traded in fairly narrow ranges Thursday as the attention in markets shifted towards upcoming U.S. jobs data following the publication of the minutes to the Federal Reserve’s last board meeting.
KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was steady around its all-time closing high at 7,188, while Germany’s DAX fell 0.2 percent to 11,564. The CAC-40 in France was 0.2 percent lower at 4,891. U.S. stocks were poised for modest losses at the open with Dow futures and the broader S&P 500 futures down 0.2 percent.
FED MINUTES: U.S. central bank officials think they may need to accelerate interest rate hikes if a faster-growing economy leads to lower than expected unemployment. For now they believe they can stick to gradual increases, according to minutes of the Fed’s December meeting. Officials also discussed the impact of Donald Trump’s proposed economic stimulus program and attributed surging stock prices, rising bond rates and the stronger dollar following the election to investor enthusiasm over the president elect’s plans.
JUST THE PRECURSOR: The minutes were just a taster for the likely big economic event of the week — Friday’s publication of the nonfarm payrolls report for December. Though the upcoming moves by the incoming Trump administration are likely to have an impact on Fed rate hike predictions, the backdrop is likely to remain that the U.S. economy is growing strongly with unemployment falling steadily. Later Thursday, traders will have the monthly non-manufacturing survey from the Institute for Supply Management to digest.
ANALYST TAKE: “Given the uncertainties that lie ahead though, I expect it will be another volatile year in which expectations for interest rates will change on a regular basis,” said Craig Erlam, senior market analyst at OANDA.
UPBEAT ASIA: Solid figures out of China and Hong Kong raised investor optimism about the outlook for their economies. Caixin’s monthly purchasing managers index, or PMI, for the services industry posted its biggest rise in activity for 17 months in December. The Nikkei composite PMI for Hong Kong, meanwhile, showed that activity expanded for the first time since February 2015.
ASIA’S DAY: Japan’s benchmark Nikkei 225 index fell 0.4 percent to close at 19,520.69 a day after hitting its highest level in 13 months as the yen’s strength hurt shares of some exporters. South Korea’s Kospi edged 0.2 percent lower to 2,041.95 but Hong Kong’s Hang Seng rose 1.5 percent to 22,456.69. The Shanghai Composite index in mainland China added 0.2 percent to 3,165.41. Australia’s S&P/ASX 200 climbed 0.3 percent to 5,753.30.
CURRENCIES: The euro clawed back some further ground against the dollar, trading 0.2 percent higher at $1.0508, while the dollar slid 0.7 percent at 116.37.
ENERGY: Benchmark U.S. crude was up 36 cents at $53.62 a barrel while Brent rose 41 cents to $56.87 a barrel in London.