European equities opened in positive territory, building on gains in the previous session
Wall Street stocks finished slightly higher on Wednesday as investors digested the minutes from the Fed’s June meeting. The central bank hinted at another 50- or 75-basis point move in July. On the data front, the ISM services PMI data came in better than expected as well as job openings. The Dow Jones Industrial Average gained 0.23%, the S&P 500 added 0.36%, and the tech-heavy Nasdaq Composite rose 0.35%. In individual stocks, shares of Chevron fell 1,32% while Diamondback Energy plunged nearly 3.5% as energy stocks led the losses amid a slump in oil prices.
Asian equity markets finished in positive territory in Thursday even as the Fed acknowledged that its more restrictive policy could weaken the economy. The Shanghai Composite Index rose just 0.3%, with tighter COVID vaccine requirements in Beijing capping gains in the Chinese markets. The Nikkei 225 in Tokyo rallied nearly 1.5%, despite Japan media reporting that Tokyo is considering tightening up COVID restrictions. The Kospi in Seoul climbed 1.84%, and Sydney’s S&P-ASX 200 was 0.8% higher.
In Europe, stocks opened higher, building on gains in the previous session. On the data front, industrial production in Germany increased by 0.2% on a monthly basis versus a 0.4% expected and 0.7% last. The annual figure dropped 1.5% in May versus -2.2 in the previous month. Gains in equities should be limited in the near term as investors are cautiously waiting for the ECB meeting minutes due later today.
In currencies, the dollar has steadied after the recent rally that took the prices to fresh twenty-year highs above the 107.00 figure. The USD index has settled marginally below this level on Thursday, refraining from a deeper correction despite the overbought conditions, which implies that the bulls are not out of the game just yet. Against this backdrop, EURUSD saw a major dip to 1.0160 on Wednesday, struggling to regain the 1.0200 mark in early European deals today. Now, traders shift focus to the ECB’s June meeting minutes that could help the shares currency recover somewhat if the central bank strikes a more hawkish tone. Otherwise, the pair could see fresh multi-year lows in the near term.