MARKET WRAPS
Watch For:
EU PPI; Services PMI data for the Eurozone, U.K., France, Germany, Italy; trading update from Rio Tinto
Opening Call:
Shares may get a lift from U.S. Fed Chair Powell's comments that he still sees room for rate cuts this year. In Asia, stock benchmarks were mostly higher with China and Hong Kong markets closed for a holiday; Treasury yields broadly gained; the dollar edged lower; while oil and gold advanced.
Equities:
European stock futures were tracking broadly higher early Thursday.
Powell said Wednesday that a strong economy hasn't changed the central bank's expectation that interest rate cuts will be warranted later this year.
Across the Atlantic, the eurozone's annual rate of inflation fell for the third straight month in March, a surprise that makes it more likely that the European Central Bank will cut its key interest rate in June.
Fresh data in the U.S. pointed to a still-growing economy, albeit at a measured pace. Focus now shifts to the jobless claims later in the day and the jobs data on Friday.
Forex:
The dollar edged slightly lower in Asia. U.S. 'exceptionalism', or the outperformance of the U.S. economy relative to its peers, is expected to benefit the U.S. dollar against the euro and other currencies, Pimco said.
Pimco anticipates "further U.S. economic exceptionalism" and therefore favors the U.S. dollar over the euro and other European currencies such as the Swiss franc and Swedish krona.
Bonds:
Treasury yields were broadly higher after Fed Chairman Powell indicated that the central bank has time to let the data guide its interest-rate policy.
And the ADP employment report for March showed the biggest jump in private-sector hiring since July. The data came ahead of Friday's employment report for March.
"With the market again assiduously focused on the 10-year Treasury yield, the ADP report offers little confidence that inflation is easing at clip that will allow the Fed to begin cutting rates as soon as the May FOMC [Federal Open Market Committee] meeting," said Quincy Krosby, chief global strategist for LPL Financial in Charlotte, N.C.
Robust labor-market data and manufacturing-sector readings in the past few days have put the chance of a 25-basis-point cut from the Federal Reserve by June at 61.7%, down slightly from 63.7% a week ago.
Energy:
Oil prices were higher in Asia buoyed by intensifying geopolitical tensions after a strike by Israel on Iran's embassy in Syria stoked fears of a widening conflict in the Middle East, while OPEC+ ministers made no changes to current output cuts in a meeting on Wednesday.
"Bottom line, geopolitics are driving the energy markets right now and until tensions begin to ease and the attacks stop (or at least slow down) there will be a fear bid in oil," Sevens Report Research said.
Metals:
Gold advanced but may be weighed by technical factors following its recent rally, analysts said.
The precious metal is looking technically overbought, said Fawad Razaqzada, market analyst at City Index and FOREX.com.
Gold needs to "work off" its overbought conditions to encourage fresh buying, by consolidating so that momentum indicators such as the relative strength index begin to pull back, Razaqzada said.
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Copper prices gained amid positive sentiment. Copper has hit its highest level since January 2023, with the rally supported by economic data showing a slowdown in the U.S. services sector, which reinforced hopes that the Federal Reserve may cut rates soon, ANZ Research analysts said.
The analysts added that the outlook for demand continues to improve. In top consumer China, there are positive signs like better economic data and policies to boost car purchases.
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Support looms for iron-ore prices after their recent decline, UBS said, with prices falling to $100/ton recently on weak Chinese steel output, high inventories, and demand concerns, despite strong steel exports.
UBS expects construction to recover from a slow period after the Lunar New Year holidays and improve through April and May and sees iron-ore prices having cost support around $90-$100/ton in the near term. Still, UBS acknowledges the risk that Chinese steel output stays weak.
TODAY'S TOP HEADLINES
Powell Still Sees Room for the Fed to Cut Rates This Year
Stronger-than-anticipated economic activity this year hasn't changed the Federal Reserve's broad expectation that declining inflation will allow for interest-rate cuts this year, Chair Jerome Powell said Wednesday.
Powell pointed to signs that labor-market conditions are less tight than they have been in recent years, a view that has eased concerns that paychecks and prices might rise in tandem.
What's Wrong With the Economy? It's You, Not the Data
In The Wall Street Journal's latest poll of swing states, 74% of respondents said inflation has moved in the wrong direction in the past year.
This assessment, which holds across all seven states, is startling, sobering-and simply not true. I'm not stating an opinion. This isn't something on which reasonable people can disagree. If hard economic data count for anything, we can say unambiguously that inflation has moved in the right direction in the past year.
The British Are Coming for Your White-Collar Job
LONDON-When Margot Robbie hosted a pool party at the Barbie Dreamhouse in last year's hit film, she was thousands of miles away from sunny Malibu, on a soundstage in a commuter town about an hour outside of London.
"Barbie" was mostly filmed at Warner Bros.' U.K. studios, the flashiest example yet of Britain's rising role in global film production. "I want Hertfordshire to be the next Hollywood," U.K. Treasury chief Jeremy Hunt told a newspaper here last year.
Oil, gold and the dollar are surging. Here's why that could derail the Fed's rate-cut outlook.
A global economic recovery is fueling a blistering commodities rally in 2024 - threatening to derail the Federal Reserve's efforts to curb inflation and potentially clouding its path to cutting interest rates by mid-year, according to market strategists.
From oil and gasoline to gold and silver, commodities have started the year on a high note, with some surging to levels not seen in years. The rally has helped stoke renewed inflationary fears among financial-market investors, and spurred worries that the U.S. central bank may have to keep borrowing costs higher for longer than expected.
Sanofi to Settle Claims That Heartburn Drug Zantac Caused Cancer
Sanofi said it reached an agreement in principle to settle about 4,000 claims around allegations that its heartburn drug Zantac caused cancer.
The company said in a statement on Wednesday that the financial terms of the deal are confidential. Sanofi said no concessions of liability had been made, and that it still believes the plaintiffs' claims that Zantac causes cancer are without merit.
Rio Tinto Faces Possible Norway Fund Divestment Over Alleged Deforestation Links
The ethics adviser to Norway's giant sovereign-wealth fund is examining whether to recommend the investor sell its multibillion-dollar stake in miner Rio Tinto because of environmental concerns, according to people familiar with the matter.
The Council on Ethics, as the adviser is called, has told Rio Tinto in recent months that it is assessing the mining company for environmental damage from its operations in the Brazilian Amazon, according to a letter viewed by The Wall Street Journal.
PepsiCo and Carrefour End Food Fight, Returning Snacks and Drinks to Shelves
Pepsi and Cheetos are back in stock at Carrefour stores in France, ending an impasse over grocery prices that stretched for three months between one of the world's biggest food companies and one of Europe's largest grocers.
Carrefour and PepsiCo Wednesday said they had reached a deal for PepsiCo products to return to stores in France. Negotiations on returning PepsiCo brands to Carrefour stores in four other countries are ongoing, according to a person familiar with the matter.
Paramount Enters Exclusive Merger Talks With Skydance, Spurning $26 Billion Offer From Apollo
Members of Paramount Global's board agreed to enter exclusive merger discussions with Skydance, favoring it over a recent $26 billion all-cash offer from private-equity firm Apollo Global Management.
The move means the entertainment conglomerate is putting on pause any conversations with other bidders for 30 days while it tries to work out a deal with Skydance, a production company led by David Ellison, people familiar with the matter said.
How Disney's Bob Iger Vanquished Wall Street Agitator Nelson Peltz
Bob Iger wanted to make a splash.
The Disney CEO last fall huddled with his top lieutenants, strategizing big-ticket ideas for virtually every line of the entertainment giant's business-from streaming to movies to sports.
Apple Isn't Making an EV, but Chinese Phone Makers Are Showing They Can
Apple just put its decadeslong pursuit of an electric vehicle into reverse. But its Chinese smartphone rivals are stepping on the accelerator pedal.
That could reshape the high-end EV market in China, and eventually perhaps globally: Several of the new entrants already have strong name recognition and a formidable reputation for quality at the right price. In the near term, it will add further fuel to the price war burning up major EV makers' margins.
Write to singaporeeditors@dowjones.com
Expected Major Events for Thursday
00:01/IRL: Mar Ireland Services PMI
06:30/SWI: Mar CPI
06:30/HUN: Feb Preliminary External Trade
07:15/SPN: Mar Spain Services PMI
07:45/ITA: Mar Italy Services PMI
07:50/FRA: Mar France Services PMI
07:55/GER: Mar Germany Services PMI
08:00/EU: Mar Eurozone Services PMI
08:00/UK: Mar UK monthly car registrations figures
08:30/UK: Mar UK Official Reserves
08:30/UK: Mar S&P Global UK Services PMI
09:00/EU: Feb PPI
09:00/CYP: Mar Registered Unemployed
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04-04-24 0015ET
