The People’s Bank of China left its medium-term policy rate unchanged
US stocks were slightly higher on Wednesday to steady after the biggest one-day drop in more than two years. On the data front, PPI rose by a faster-than-expected 7.3% last month, thus cementing inflation concerns. Still, the Nasdaq rose 0.74%, the S&P 500 added 0.34% and the Dow Jones Industrial Average inched up 0.10%. In individual stocks, shares of Starbucks rallied by than 5.5% after the company said it sees earnings growing by between 15% and 20% over the next three years, up from its prior forecast of a gain of between 10% and 12%. The coffee chain also pledged to invest around $3 billion on new technologies.
Similarly, Asian equity markets edged higher on Thursday, steadying from recent losses. However, the Shanghai Composite bucked the trend to lose more than 1% after the People’s Bank of China left its medium-term policy rate unchanged, mostly because of the recent depreciation in the yuan. On the positive side, Chinese property stocks advanced after reports that the authorities will roll out more relief for the troubled sector. Elsewhere, the Nikkei 225 added 0.20% even as the data showed Japan logged a record trade deficit in August.
In Europe, equities opened mixed and choppy after finishing lower on Wednesday. The pan-European Stoxx 600 opened in the red before turning slightly positive. On the data front, French CPI for August came in at 5.9% versus 5.8% in the prior month and 5.8% expected. Elsewhere, the Bank of England delayed its monetary policy meeting until next week due to the death of Queen Elizabeth II. US stock index futures were trading marginally higher in early pre-market deals.
In currency markets, the US dollar is back on the offensive after a modest retreat seen on Wednesday. The USD index bounced off the 109.30 zone to settle marginally below the 110.00 level that represents the immediate upside target for bulls at this stage. As such, EURUSD struggles to get back above the descending 20-DMA, holding below parity on Thursday after a strong rejection from the 1.0200 figure at the start of the week. The pair is likely to stay pressured in the short term.