MARKET WRAPS
Watch For:
Eurozone industrial production; U.K. GDP, trade, industrial production, business investment; trading updates from Maersk, Thyssenkrupp, Adyen, RWE, Hapag-Lloyd, Oersted, Pandora, Entain, Antofagasta, Standard Bank
Opening Call:
European stock futures rose early Thursday. Asian stock benchmarks advanced; the dollar was flat; Treasury yields fell; oil futures were lower; while gold was little changed.
Equities:
Stock futures point to a higher open in European markets on Thursday as signs of cooling U.S. inflation tempered expectations for an imminent Federal Reserve rate increase.
"Softer U.S. inflation, both in the headline and core, provides comfort that inflation is not re-accelerating dangerously, although pipeline risks from energy and chip-flation remain," said Mizuho Securities' Vishnu Varathan.
Forex:
"US CPI inflation came in very much in line with market expectations, not strong enough or weak enough to break the DXY Index out of its lower 99.4-100.1 range set after USD/JPY's sell-off from the joint US-Japan interventions," said DBS's Philip Wee.
Bonds:
Treasury yields were lower. U.S. inflation offered few surprises-being neither firm enough to make a September interest-rate hike more likely, nor cool enough to seriously quiet debate about a rate increase in the coming months.
A $42 billion Treasury auction of 10-year notes also had little effect on the market, meeting solid, but not spectacular, demand from investors.
Energy:
Oil futures fell early Thursday. U.S. crude oil inventories rose unexpectedly last week as imports increased and exports fell, according to the U.S. Energy Information Administration.
The latest data have raised doubts about the strength of U.S. demand, said Antonio Di Giacomo, senior market analyst at XS.com. A sustained increase in commercial inventories could limit some of the momentum from geopolitical risks, particularly if it coincides with signs of slowing fuel consumption in the coming weeks, he added.
Metals:
Gold was flat in Asia after the U.S. CPI data. "This continues the steady stream of data that have tempered expectations of monetary tightening and should provide further support for gold in the coming months," ANZ said. Copper fell in Asian trading amid signs of cooling Chinese demand.
The Yangshan premium, or the premium paid on top of the benchmark LME copper price for refined copper to be imported into China, slipped to $96 a ton, after reaching $115 a ton last month amid strong demand, ANZ said. This suggests higher prices have cooled demand and pushed Chinese buyers to the sidelines, ANZ added. Iron ore end-user consumption in China is recovering from low levels, but weak steelmaker profitability is limiting the scope for a meaningful improvement in ore demand, Baocheng Futures said.
On the supply side, port arrivals fell temporarily due to typhoon-related disruptions, but miners' shipments remain elevated, suggesting arrivals are likely to recover. Overseas supply remains ample, although domestic mine output is weakening, Baocheng Futures added.
TODAY'S TOP HEADLINES
Chip stocks are closing in on a bull market. Here's why some analysts are nervous.
Chip stocks are closing back in on a bull market, fueled by optimism around recent corporate earnings. But some analysts caution that the results don't necessarily warrant widespread enthusiasm.
It was a strong day for the semiconductor sector on Wednesday, with shares of Sandisk SNDK and Micron Technology MU gaining about 6% and 5%, respectively. SK Hynix SKHY, another major beneficiary of memory-chip demand, saw its American depositary receipts rise 9%.
Investors are chasing the latest rally in gold as the yellow metal hits strongest level in 2 months
Gold settled at a two-month high on Wednesday, and investors who spent the summer waiting for an opening are now chasing a rally that many hope still has room to run.
The yellow metal popped 0.6% on Wednesday, with its most-active contract GC00 settling at $4,467.50 per ounce after topping $4,500 in morning action. Wednesday's settlement level was the highest for gold since June 4, according to FactSet data.
OPEC Cuts Oil-Demand Forecast Again as Hormuz Talks Stall
The Organization of the Petroleum Exporting Countries again cut its forecast for global oil-demand growth for this year, as stalled talks to reopen the critical Strait of Hormuz waterway and risks in the Red Sea prolong disruptions to global supplies.
The group of oil-rich countries now expects global oil demand to grow by 580,000 barrels a day, down from 780,000 barrels a day previously. Next year's demand growth is instead seen at 2.16 million barrels a day, up from a previous estimate of 1.94 million barrels a day.
Apple in Talks to Pay Publishers to Improve AI-Powered Siri
Apple is discussing new deals with publishers to use their content to deliver current news and information, part of an effort to improve its AI-powered Siri voice assistant.
The iPhone maker has reached out to publishers in recent months, according to people familiar with the matter. The proposed new, multiyear deals would provide Apple with access to content to help power Siri AI, which is expected to roll out later this year, the people said.
Tariff Refunds Are Here-and Turbocharging Earnings
Tariff refunds have begun rolling in to big U.S. companies-in some cases providing a solid boost to earnings.
Contrary to warnings that the refund process could prove slow and messy, many companies appear to have received the money with remarkable speed. So far, over 40 S&P 500 companies have reported some $9.6 billion in refunds in the past quarter or so, including at least $2.1 billion in cash already received.
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Expected Major Events for Thursday 06:00/NOR: 2Q Labour force survey
06:00/SWE: Jul CPI
06:00/ROM: Jun Industrial production
06:00/UK: 2Q Business investment in the UK: provisional results
06:00/UK: Jun Index of Production
06:00/UK: Jun UK trade
06:00/UK: Jun Index of services
06:00/UK: 2Q First quarterly estimate of GDP
06:00/UK: Jun Monthly GDP estimates
06:30/HUN: Jun Construction
06:30/SWI: Jul Import Price Index
06:30/SWI: Jul PPI
07:00/TUR: Jun Balance of Payments
07:00/SPN: Jul CPI
07:00/SVK: Jul CPI
07:00/SVK: Jul Core & net inflation development
08:00/CZE: Jun Monthly Balance of Payments
08:00/POL: 2Q Flash estimate GDP
08:00/POL: Jul CPI
08:00/POL: Jun Merchandise trade
08:00/NOR: Norges Bank monetary policy decision
08:30/UK: 2Q Mortgage and landlord possession statistics
08:30/UK: 2Q Mortgage Arrears and Possessions data
09:00/CRO: Jul PPI
09:00/EU: Jun Industrial Production
10:00/IRL: Jul CPI
11:30/UK: Jul NIESR Monthly GDP Tracker
12:00/POL: Jun Balance of Payments
15:59/UKR: Jun POSTPONED: Trade
23:01/UK: Jul Scottish Retail Sales Monitor
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