There is some caution in the markets with the ECB scheduled to release the minutes from its last meeting
US stocks finished sharply higher overnight, with the Dow Jones having its best day since July, closing at the highest level since September 2, as investors regained hope that at least a partial deal on additional U.S. fiscal stimulus may take place eventually. Meanwhile, minutes of the Fed meeting showed that the officials believed the economy was recovering faster than expected, adding to the bullish impetus in stocks ahead of the closing bell. As a result, the Dow Jones Industrial Average rose 1.91%, the S&P 500 gained 1.74%, and the Nasdaq Composite added 1.88%.
In Asia, equities were mostly higher on Thursday amid the resurgent stimulus hopes after Trump urged lawmakers to pass a set of smaller coronavirus relief measures. Japan’s Nikkei 225 index finished 0.9% higher, Australia’s S&P/ASX was up 1%, the Kospi in South Korea ended 0.2% higher while Hong Kong’s Hang Seng index was 0.5% lower in late afternoon trading. Shanghai’s Composite index remains closed for a national holiday.
European markets opened on a positive note after the US President stoked hopes that a smaller aid package could be passed by lawmakers. Also, German exports rose for the fourth consecutive month, growing 2.4% in August after a 4.7% rise in July. At the same time, there is some caution in the markets with the ECB scheduled to release the minutes from its last meeting later in the session.
Meanwhile, the greenback is marginally lower against major counterparts, with the USD index extending losses to the 93.50 region ahead of the weekly initial jobless claims data due later in the day. EURUSD continues to flirt with the 20-DMA, a break above/below which will determine the further direction in the short term. The ECB meeting minutes and jobless claims data could affect further dynamics in the pair today. Should the central bank strike a dovish tone while commenting on the economic recovery, the euro may come under some selling pressure. The immediate support arrives around 1.1730-1.1725.