Yahoo Finance FTSE 100 today: London markets set to open green; US jobs data key for direction
Moving markets today: Asian stocks mixed, oil prices up, US dollar nears 8-week low; China’s may exports surge 7.6 per cent, focus on US non-farm payrolls
The recent uptrend in US stock and bond markets halted on Thursday as investors awaited economic health data. Asian stocks are poised to rebound after two weeks of losses following rate cuts by major central banks. Oil prices inched up on reassurances from OPEC+ but are on track for a third weekly decline. Gold is set for its first weekly increase in three weeks as the US dollar and yields decline. China’s May exports surged by 7.6 per cent, while imports rose by 1.8 per cent. Japan witnessed its first rise in household spending in 14 months. Investors are eagerly awaiting the US non-farm payrolls report for May, a pivotal indicator before the Federal Reserve’s June 11-12 policy meeting. The FTSE 100 ended higher on Thursday, with futures indicating a positive start for Friday. Here are five key takeaways for your day.
China’s May exports jump 7.6 per cent, imports up 1.8 per cent
China’s exports rose by 7.6 per cent and imports by 1.8 per cent in May, surpassing economists’ forecasts. This contrasts with the previous month’s figures of 1.5 per cent and 8.4 per cent. Last month, China’s trade surplus expanded to $82.62 billion, surpassing expectations of $73 billion and the April figure of $72.35 billion. China’s trade surplus with the US increased to $30.8 billion in May, contributing to a total surplus of $128.2 billion for January to May. The data reflects varying recovery speeds across different sectors of China’s $18.6 trillion economy.
Japan sees first increase in household spending in 14 months
For the first time in 14 months, household spending in Japan has risen, suggesting that the central bank might start to reconsider its ultra-loose monetary policy. In April, consumer spending increased by 0.5 per cent from the previous year, with notable rises in education, clothing, and shoe purchases, according to the internal affairs ministry’s report on Friday. Despite this yearly growth, spending decreased by 1.2 per cent compared to the previous month.
India’s central bank holds rates as anticipated
As expected, the Reserve Bank of India (RBI) decided to keep its main interest rate unchanged on Friday. This decision comes amidst solid economic growth, giving policymakers the opportunity to focus on gradually reducing inflation towards the targeted 4 per cent level in the medium term. The Monetary Policy Committee (MPC), consisting of three RBI members and three external members, opted to maintain the repo rate at 6.50 per cent for the eighth consecutive policy meeting.
What’s on the radar
As the week wraps up, investors will be keenly focused on the US non-farm payrolls report for May. The forecast predicts an addition of 185,000 jobs, just above April’s figure of 175,000. The annual wage growth rate is expected to hold steady at 3.9 per cent.
The US jobs report is particularly significant as it will be the last major economic indicator before the Federal Reserve’s monetary policy meeting on June 11-12.
Earlier in the trading session, the spotlight will also be on Germany’s April industrial production data, which will be released along with the UK house price survey from mortgage lender Halifax.
Asian markets mixed ahead of US jobs data
The Dow Jones Industrial Average went up by 0.20 per cent to reach 38,886.17, while the S&P 500 dipped slightly by 0.02 per cent to 5,352.96, and the Nasdaq Composite decreased by 0.09 per cent to 17,173.12.
Both the S&P 500 and Nasdaq initially hit new intraday record highs but then pulled back as technology stocks declined. Utilities and industrials also contributed to the S&P 500’s drop, while consumer discretionary and energy sectors led the gains.
GameStop’s shares soared by 47 per cent after “Roaring Kitty,” a popular online stock influencer, announced a livestream for Friday on YouTube. Lululemon Athletica’s stock rose by 4.8 per cent following better-than-expected first-quarter profit and revenue results.
However, US-listed shares of NIO fell by 6.8 per cent after the Chinese electric vehicle company reported a quarterly net loss. Five Below saw its shares drop by 10.6 per cent after reducing its annual net sales forecast.
UK stocks rose as the ECB cut rates and commodities gained. Futures indicate a positive start for Friday, with EURO STOXX 50 steady and FTSE 100 up 0.08 per cent to 8305.5. In the US, S&P 500 futures up 0.04 per cent and Nasdaq futures up 0.12 per cent.
Friday witnessed the dollar near an eight-week low, with the US dollar index barely changing at 104.13, close to its recent low of 103.99, marking its first dip below 104 since April 9.
In the Asian markets, Hong Kong’s Hang Seng Index inched up by 0.14 per cent, and Chinese blue chips CSI300 showed a slight increase of 0.23 per cent. However, Japan’s Nikkei N225 faced a small decline of 0.16 per cent. Early in the Asia trading session, the Kospi index rose by 0.6 per cent, driven by a significant increase of up to 5.6 per cent in SK Hynix, the world’s second-largest producer of memory chips.
In commodities, Oil prices rose slightly on Friday, buoyed by comments from OPEC+ members Saudi Arabia and Russia indicating a potential pause or reversal in output agreements. However, markets were still set for their third consecutive week of losses.
Brent crude futures increased by 2 cents to $79.89 per barrel, while US West Texas Intermediate crude futures rose by 4 cents to $75.59. Gold prices also saw a 0.41 per cent increase to $2385.51.
