Friday Morning Briefing: Asia Trades Negative, Oil Holds Above $50
Asian markets declined tracking weak U.S. stocks on Thursday. Concerns over the U.S. economy and stability in Europe kept the U.S. dollar in check. Oil prices soared above the $50 per barrel mark while gold too made a comeback.
Jobless Claims Rise
Fresh concerns emerged on the revival of the U.S. economy as number of Americans filing for unemployment benefits was at its highest level since June.
Jobless claims increased by 17,000 to 268,000 in the week that ended on November 26 and included Thanksgiving, according to a labor department report released on Thursday. The median forecast in a Bloomberg survey called for a figure of 253,000.
The data comes ahead of the meeting of the U.S. Federal Reserve on December 13-14. Traders continue to price in a 100 percent probability of a hike of at least a quarter percentage point, according to futures rates tracked by Bloomberg. Investors will now look forward to the non-farm payrolls data, scheduled to be released later in the day.
U.S. equity markets ended Thursday’s session on a mixed note. While the Dow Jones Industrial Average Index gained 0.4 percent and closed at a fresh lifetime high, the S&P 500 index and the NASDAQ composite index shed 0.3 and 1.3 percent respectively.
Oil Momentum Continues
Oil prices were headed for its biggest weekly gain since August 2015 post a first supply cut deal in eight years by members of the OPEC (Organization of Petroleum Exporting Countries). Investors are now focussed on how strictly will the deal be implemented.
West Texas Intermediate Crude for January delivery was little changed at $51.06 per barrel. Oil prices have gained nearly 11 percent this week after OPEC members agreed to reduce collective output by 1.2 million barrels per day while non-member country Russia pledged to cut 3,00,000 barrels per day.
Analysts at Morgan Stanley and Goldman Sachs Group Inc. are expecting oil prices to rally to as high as $60 per barrel.
Dollar Rally Fizzles
The U.S. dollar was headed for its first weekly drop since the election of Donald Trump to the White House in early November. The Bloomberg Dollar spot index fell 0.1 percent. The yen strengthened a further 0.3 percent after a similar gain on Thursday, trimming the losses for the week to 0.4 percent.
The euro and the Korean won maintained their gains against the greenback as well.
The SGX Nifty index was trading lower by 0.75 percent at 8,151, indicating a weak start for Indian equities. Indian benchmark indices snapped a four-day winning streak on Thursday, led by a sell-off in Auto stocks as well as rising oil prices that weighed on the minds of the investors.