US stock market rebounded on Wednesday as risk appetite improved and oil rose. The dollar weakened after minutes from the Federal Reserve’s June meeting suggested the central bank will likely not raise rates soon: the live dollar index data indicate the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, edged 0.12% lower to 96.074. The Dow Jones Industrial Average gained 0.4% settling at 17918.62. The S&P 500 closed 0.5% higher at 2099.73 led by healthcare and consumer discretionary stocks. The Nasdaq Composite Index rose 0.8% to 4859.16. Federal Reserve’s June 14-15 policy meeting minutes showed policy makers will likely not raise rates in July after the report only 38000 jobs were created in May. Tomorrow June payroll report will be published and a number close to 200000 will provide support to advocates of tighter monetary policy showing the labor market is still strong and the low May jobs number was not an indication of a weakening trend. Economic data were mostly positive on Wednesday: the Institute for Supply Management’s Service PMI reading of 56.5 in June was much stronger than expected. At the same time the US trade deficit in May widened by 10% to a three-month high of $41.1 billion due to higher imports and oil prices. Today at 14:15 CET ADP Non-farm employment change for June will be published, the tentative outlook is negative for dollar. At 14:30 CET Initial Jobless Claims and Continuing Claims will be released in US, the outlook is neutral. At 16:30 CET Natural Gas Storage Change will be released by the Energy Information Agency.
European stock markets retreated on Wednesday as added uncertainty of UK’s decision to leave the European Union undermined investor confidence. The euro weakened against the dollar and the Pound hit a new 31-year low on expectations of a rate cut at Bank of England’s meeting next week after BOE Governor Carney’s warning last week that further monetary easing was likely this summer. The Stoxx Europe 600 dropped 1.7%. Banking stocks were the worst performers slumping on news three more UK property funds suspended trading Wednesday, bringing the total to six and adding to post-Brexit anxiety in global financial markets. Germany’s DAX 30 index closed 1.7% lower at 9373.62. France’s CAC 40 index dropped 1.9% and UK’s FTSE 100 index fell 1.3%.Today at 10:30 CET May Manufacturing Production will be published in UK, the tentative outlook is negative for the Pound.
Asian stocks are edging higher today with Hong Kong’s Hang Seng Index up 1.0% while Shanghai Composite Index is down 0.01%. Australia’s S&P ASX 200 is 0.5% higher despite a downgrade of Australia’s sovereign credit rating outlook to AAA negative from AAA stable by global ratings agency Standard & Poor’s. Nikkei slid 0.7% today as strong haven demand on persistent Brexit concerns contributed to renewed strength in the yen. The stronger yen notwithstanding, exporters paired previous session’s losses with Toyota gaining 0.18% and Panasonic closing 0.3% higher.
Oil futures prices are edging lower today after rebounding on Wednesday following the American Petroleum Institute industry group report US crude stockpiles fell by 6.7 million barrels last week, declining for a seventh week in a row. At 17:00 CET today US Crude Oil Inventories will be released by the Energy Information Agency. September Brent crude rose 1.8% to $48.80 a barrel on London’s ICE Futures exchange on Wednesday.