MARKET WRAPS
Watch For:
EU PPI; services PMI data for EU, U.K., Germany, France, Italy; trading updates from Impala Platinum, M&G
Opening Call:
European stock futures edged higher, mirroring gains in Asian stock benchmarks; U.S. Treasurys declined; the dollar weakened. Oil futures were mixed and gold rose.
Equities:
Stock futures in Europe gained early Thursday as investors cheered a pause in the global bond selloff.
Comments from New York Fed President John Williams in an interview with CNBC on Wednesday soothed concerns over an imminent interest-rate increase by the Federal Reserve.
Williams indicated that he doesn't see clear-cut evidence currently that the Fed must lift interest rates to respond to persistent inflation.
Williams is the No. 2 member of the Federal Reserve's rate-setting committee and has often represented the thinking of Fed officials near the center of the policy debate.
"Fed funds futures modestly reduced rate hike expectations to 37.8bp of tightening for this year, compared with 40bp earlier in the week," OCBC Group Research's global markets team said.
Forex:
The U.S. dollar weakened as declines in U.S. Treasury yields diminished the appeal of U.S. fixed-income assets and demand for the greenback. Treasury yields and Brent crude oil retreated from Wednesday's highs, OCBC Group Research strategists said. "Attention now turns to Fed's Waller," who speaks later Thursday, they added.
Bonds:
Volatility has become the new normal in bond markets, due to geopolitical tensions and less forward guidance from the Fed, said Truist's Chip Hughey.
Treasury yields cooled down from overnight highs, but remain elevated. Hughey said the decline was caused by a brief "flight to quality." He expects yields to decline alongside oil prices once traffic in the Strait of Hormuz normalizes.
Societe Generale expects credit spreads on euro investment-grade bonds to remain relatively steady in the near term due to strong fund inflows and healthy corporate earnings. Spreads are likely to stay within the current levels unless a major trigger occurs. This could include "a more aggressive corporate releveraging that finally sees some weakening in corporates' ability to service debt," it said.
Energy:
Crude oil futures were mixed after rising for a third consecutive session on Wednesday. However, losses could be limited by ongoing worries over a further escalation in strikes between the U.S. and Iran and oil flows out of the Middle East.
Also, data released by the EIA overnight showed U.S. crude oil inventories fell more than anticipated last week. Commercial crude oil stocks excluding the Strategic Petroleum Reserve fell 4.5 million barrels in week ended Aug. 28, compared with expectations for a decline of 300,000 barrels in WSJ survey of analysts.
Metals:
Gold gained. U.S. non-farm payrolls due this week could influence interest rate bets for the Fed's upcoming September meeting, said Konstantinos Chrysikos of Kudo.com.
Softer data could ease the downside risk, while stronger figures or more hawkish Fed comments could add additional weakness to gold, Chrysikos said. Middle East tensions and elevated oil prices remain sources of risks for the yellow metal, Chrysikos added.
Copper prices rose, supported by supply concerns after Chile's July output fell 9.4% from a year earlier due to severe weather and mine maintenance, Huatai futures analysts said.
Low domestic inventories continue to underpin the market, though elevated prices are capping demand as downstream buyers remain cautious ahead of the traditional September peak season, they said. Overall, copper remains cautiously bullish, with any price pullback likely to attract buying interest.
Iron ore was flat. The supply-demand dynamics for iron ore remain largely unchanged, according to Baocheng Futures. Subdued demand continues to weigh on prices, they say. That said, elevated ocean freight costs and preholiday restocking expectations offer some resistance to downward moves, they said.
TODAY'S TOP HEADLINES
Why Washington's 'Economic D-Day' Against Iran Faces Steep Odds
Last week, the Trump administration unveiled what it billed as an "Economic D-Day" aimed at forcing Iran to reopen the Strait of Hormuz and return to the negotiating table.
But the experience of Western sanctions and economic pressure on autocracies such as Cuba, North Korea, Venezuela and Syria shows the challenges facing Washington in trying to bend Tehran to its will. Indeed, the strongmen ruling such countries have historically used a mix of violence, economic adaptation and political suppression that enables them to withstand economic pain for years, if not decades.
Uber, Wayve Bring Robotaxis to London
Uber Technologies and British startup Wayve are rolling out their robotaxi service in London, securing a head start in a key battleground for autonomous-vehicle players.
Starting Thursday, passengers using Uber's app in the U.K. capital could be matched with a vehicle outfitted with Wayve's autonomous-driving technology. However, the service will come with a human driver behind the wheel to monitor and take over if needed, as the companies work to secure further regulatory approvals for fully driverless operations.
Saudi Nuclear Agreement Could Open a Path to 20% Enrichment
New details of the Trump administration's agreement to provide Saudi Arabia with a civilian nuclear program are spurring criticism that the landmark deal doesn't do enough to head off the risk of nuclear proliferation.
The text of the accord was shared with lawmakers last week along with a raft of related documents. It outlines a road map for how uranium might be enriched in the kingdom's territory after further consultations, including at a level of nearly 20%.
Tech CEOs, Trump Administration Ask G-20 to Adopt Pro-AI Policies
CHAPEL HILL, N.C.-Tech executives and Trump administration officials urged policymakers from other leading economies to minimize artificial-intelligence regulations, arguing that strict rules could strangle an industry capable of supercharging global growth and curing diseases.
Nvidia Chief Executive Jensen Huang, OpenAI's Sam Altman, Meta Platforms CEO Mark Zuckerberg and Elon Musk of Tesla and SpaceX were among the speakers at a Group of 20 summit focused on innovation and technology, and they cautioned that aggressive regulations could limit the benefits of AI.
Ford's $30,000 EV Truck Sets Ambitious Goal: 100,000 Sales in Year One
Ford Motor is setting an ambitious target for its new electric truck that has only been seen by Tesla in the U.S.
The automaker aims to sell more than 100,000 of the trucks in its first year of production, according to people familiar with the matter. The truck, called the Ford Fathom, starts around $30,000 and will go on sale next year. Ford is seeking mainstream sales not seen by its earlier, more expensive electric vehicles.
Microsoft to Change Reporting Structure to Reflect Effects of AI
Microsoft is changing its reporting structure from three segments to two-Agents and Infra, and Devices and Consumer-as the company responds to changes brought about by artificial intelligence.
Previously, Microsoft's reporting segments consisted of Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
Write to singaporeeditors@dowjones.com
Expected Major Events for Thursday 00:01/IRL: Aug Ireland Services PMI
06:30/SWI: Aug CPI
07:00/SWI: 2Q GDP
07:00/TUR: Aug CPI
07:00/TUR: Aug PPI
07:00/CZE: 2Q Wages
07:00/AUT: 2Q GDP
07:15/SPN: Aug Spain Services PMI
07:45/ITA: Aug Italy Services PMI
07:50/FRA: Aug France Services PMI
07:55/GER: Aug Germany Services PMI
08:00/EU: Aug Eurozone Services PMI
08:30/UK: Aug UK Official Reserves
08:30/UK: Aug S&P Global UK Services PMI
08:30/UK: Aug Narrow money (Notes & Coin) and reserve balances
08:30/GER: ifo Economic Forecast
09:00/CRO: Jul Industrial Production Volume Index
09:00/EU: Jul PPI
09:00/CYP: Aug Registered Unemployed
09:00/CYP: Aug CPI
15:59/UKR: Jul Industrial Production
23:01/UK: Aug BRC-Sensormatic IQ Footfall Monitor
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