US equities were higher on Thursday as Powell continued to give insight on the path for rate cuts, while investors await the release of key economic data.
United States
The major indices in the US were higher on Thursday as Fed chairman, Jerome Powell, signalled that policymakers are becoming more confident that inflation is falling closer to the 2% target, while investors prepare for the latest non-farm payroll data. On the second day of his testimony to Congress, Powell stated that the Fed were “not far” from reaching confidence to ease monetary policy, adding rate reductions “can and will begin” this year.
In economic data, Thursday saw the release of the latest jobless claims data, with the report showing continuing and initial jobless claims came in slightly above market expectations of 1880k and 217k at 1906k and 217k respectively. Investors will now shift their focus to the latest nonfarm payroll data, which is expected to show that 200k jobs were added over the month, with the unemployment rate remaining at 3.7%.
At the close, the Dow Jones was up +0.34%, the S&P500 was +1.03% higher, and the Nasdaq Composite rose +1.51%, with the VIX at 14.42. At the close, treasury yields were relatively lower, with the 2-year rate down 5.0 basis points to 4.503% and the 10-year down -1.7 basis points to 4.085%, while the US dollar was -0.53% weaker.
Jobless Claims data
Europe
European equities were higher on Thursday on the back of comments from ECB President Christine Lagarde and the central bank revising inflation expectations. In a recent press conference, Lagarde stated she and her colleagues are not “sufficiently confident” at this moment in time to commence monetary easing, adding “we know that this data will come in the next few months. We will know a little more in April, but we will know a lot more in June.” In its latest monetary policy meeting, the ECB elected to hold rates at 4.50%, while updating its inflation outlook at 2.3% for this year, 2.7% in December and 2% for 2025.
In economic data, focus will be on the latest GDP data for the Eurozone, which is expected to show that the economy was flat over the month and slightly expanded by 0.1% over the year.
The Euro Stoxx 600 closed +0.99% higher along with DAX +0.71% and CAC +0.77% while the FTSE100 finished +0.17% higher.
Australia
The ASX is expected to open higher this morning with ASX200 futures up +46 points or +0.592% to 7,815. The index rose +0.39% on Thursday on the back of the industrial and information technology sectors leading gains to finish +1.33% and +1.03%, with energy leading losses down -1.15%, while the Australian dollar rose +0.84%.
In stocks on Thursday, the energy sector was weighed down by BHP, Rio Tinto, South32, and Woodside Energy all trading ex-dividend, while WiseTech and NextDC rose by 1.1% and 2.5% respectively. Gold miners continued to rise with Perseus Mining up 5.9%, Newmont rising 0.6%, and Evolution Mining closing 2.8% higher.
While there is no major local data, investors will be focusing on the latest inflation data out of China.
Commodities
Oil prices were lower on Thursday with WTI and Brent crude down -0.32% and -0.19% respectively to US$78.90 and US$82.81 a barrel. Iron ore futures in Singapore finished +1.24% higher on Thursday and are down -0.92% this morning to US$115.65, with copper +1.21% higher. Gold has continued its recent rise, up a further 0.50% overnight to US$2,158 while silver is +0.70% higher along with Bitcoin +1.54%.
Economic Calendar
8th March 2024
Eurozone GDP (Q4) 21:00
Canadian Unemployment (MoM Feb) 00:30
US Nonfarm Payrolls (MoM Feb) 00:30
China Inflation Data (MoM Feb) 12:30
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
