10 May

Natural gas prices are rising amid falling inventories. The Bank of England expectedly kept the rate

May 10, 2024

By JustMarkets

Yesterday, the Dow Jones Index (US30) gained 0.85%, the S&P 500 Index (US500) added 0.51%, and the NASDAQ Technology Index (US100) closed positive 0.27%. Stock index prices found support on Thursday as bond yields fell after US weekly jobless claims rose more than expected to an 8-month high, boosting hopes that the Federal Reserve will soon cut interest rates earlier.

US weekly jobless claims rose 22,000 to an 8.5-month high of 231,000, indicating a weak labor market compared to expectations of 212,000. On Thursday, hawkish comments from San Francisco Fed President Daly had a slightly negative impact on equities towards the end of the day when she stated that interest rates are currently holding back the economy. Still, inflation may take “more time” to return to the Fed’s target level.

Equinix (EQIX) climbed more than 11% and topped the list of top gainers in the S&P 500 after reporting adjusted first-quarter earnings of $992 million, above the consensus forecast of $976.9 million. Airbnb (ABNB) was down more than 6% and topped the list of Nasdaq 100 losers after reporting second-quarter revenue of $2.68, weaker than the consensus forecast of $2.74 billion.

First-quarter earnings results were mostly better than expected, which is favorable for the stock. First-quarter earnings are expected to grow 6.5% YoY, well above the 3.8% forecast.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 1.02%, France’s CAC 40 (FR40) closed higher by 0.69%, Spain’s IBEX 35 (ES35) fell by 0.92%, and the UK’s FTSE 100 (UK100) gained 0.33%.

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As expected, the Bank of England (BOE) kept its key rate unchanged at 5.25% for the sixth consecutive meeting and said the risks of continued inflation are diminishing. BOE Governor Bailey said, “It’s likely that we will need to cut the bank rate over the coming quarters and make monetary policy less restrictive over the forecast period, possibly more so than currently priced into market rates.” He added that a change in the bank rate in June “is neither ruled out nor a fait accompli.”

Precious metals prices closed higher on Thursday, with gold hitting a 1-week high and silver hitting a 2-week high. Silver prices rose on Thursday, which was a sign of stronger demand for industrial metals in China. The Chinese trade news showed that China’s exports and imports rose more than expected.

WTI crude futures climbed to $80 a barrel on Friday, rising for the third consecutive session and posting a strong weekly gain amid an improving global demand outlook and ongoing hostilities in the Middle East, which helped boost oil prices. On Thursday, data showed that China’s crude oil imports rose in April, with strong trade figures in the world’s largest crude importer signaling improving demand.

The US natural gas (XNG) prices rose more than 5% on Thursday to surpass $2.3 MMBtu, the highest in nearly four months. The rise was helped by a smaller-than-expected increase in gas in storage, reinforcing expectations of strong demand over the next two weeks and production cuts. The US inventories added 79 billion cubic feet (bcf) of gas to storage last week, while the market had expected an increase of 87 bcf.

Asian markets were mixed on Thursday. Japan’s Nikkei 225 (JP225) closed negative 0.34% yesterday, China’s FTSE China A50 (CHA50) was up 0.30% for the day, Hong Kong’s Hang Seng (HK50) was up 1.22% for the day, and Australia’s ASX 200 (AU200) was negative 1.06%.

Malaysia’s unemployment rate fell to 3.3% in March 2024 from 3.5% in the corresponding month last year, returning to pre-pandemic levels for the fifth consecutive month. The number of unemployed fell 3.8% year-on-year to 566.6k, while employment rose 1.9% to a record high of 16.53 million.

In New Zealand, the RBNZ is expected to keep the interest rate at 5.5% at its meeting later this month. This stance aligns with the OECD’s recent call for the central bank to maintain a restrictive policy until there are clearer signs that inflation is moving towards the target. In addition, the country’s manufacturing sector showed tentative signs of recovery in April despite the protracted economic downturn.

S&P 500 (US500) 5,214.08 +26.41 (+0.51%)

Dow Jones (US30) 39,387.76 +331.37 (+0.85%)

DAX (DE40) 18,686.60 +188.22 (+1.02%)

FTSE 100 (UK100) 8,381.35 +27.30 (+0.33%)

USD Index 105.23 -0.32 (-0.30%)

Important events today:
  • – UK GDP (m/m) at 09:00 (GMT+3);
  • – UK Industrial Production (m/m) at 09:00 (GMT+3);
  • – UK Manufacturing Production (m/m) at 09:00 (GMT+3);
  • – UK Trade Balance (m/m) at 09:00 (GMT+3);
  • – Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3);
  • – Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
  • – US FOMC Member Bowman Speaks at 16:00 (GMT+3);
  • – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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