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 Wall Street, which is in the midst of earnings season, was expected
to open little changed, although that could change with second
quarter growth data, due at 1230 GMT, which will give further
insight into U.S. economic health. <ECONG7>
Big name companies set to report include Colgate-Palmolive <CL.N>,
Coca-Cola <CCE.N>, Mondelez International <MLDZ.O> before the bell
and Expedia <EXPE.O>, LinkedIn <LNKD.N> and Western Union <WU.N>
after the close.
Europe's main stock markets <0#.INDEXE> were holding onto a third
day of modest gains as results from Siemens <SIEGn.DE>, Nokia
<NOK1V.HE> and Deutsche Bank <DBKGn.DE> and a rise in euro zone-wide
sentiment data boosted the mood. <ECONG7> [.EU]
There was no sign of the dollar wilting as it consolidated overnight
gains against most of the world's main currencies following
Wednesday's Fed meeting.
Fed officials had said they felt the economy had overcome a
first-quarter slowdown, was "expanding moderately" and pointed to
"solid job gains" in recent months despite a new downturn in the
energy sector and headwinds from overseas.
Traders took it as a sign that the bank was nudging towards its
first rate hike for almost a decade. The dollar was almost a cent
higher against the euro than on Wednesday at $1.0955 and at a one
week-high of 124.37 against the yen <JPY=>.
Charles Schwab managing director, Kully Samra, said the U.S.-focused
investment management firm's view was still that the Fed would push
ahead with its first rate hike in almost a decade in September but
then move cautiously.
"Because of the slow process we will see with this rate hike cycle,
we don't think it will doom the bull market (in stocks)," he said.
"Mainly because it will send a message that the Fed is at the
beginning of a normalization process and it no longer needs to treat
the patient as if it is in the trauma room."
EURO FIGHTERS
The Fed's message support U.S. bond yields overnight. The more
sensitive two-year yields had hit their highest since early June but
there was little impact on German Bunds and Europe's other core bond
markets after the region's data deluge. [GVD/EUR]
Among surprises in the figures, German unemployment saw its biggest
increase in more than a year while Sweden's second quarter economic
growth beat forecasts, driven by surprisingly strong exports.
Confidence in the pan-euro zone economy rose unexpectedly to a
four-year high in July as sentiment in industry, services and retail
improved, although inflation expectations slipped after five
consecutive months of gains.
That bolstered the view that the European Central Bank may have to
prolong its 1 trillion euro stimulus program that is now due to run
till next September.
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"The data is a bit mixed in the respect that the confidence data was
all largely positive from the euro zone countries but there were
some downside surprises on the inflation side so from a monetary
policy side it is roughly neutral," Bank of Tokyo Mitsubishi's Derek
Halpenny said.
GREAT FALL OF CHINA
The push and pull of stronger U.S. growth but potentially higher
interest rates in coming months had seen Asian stocks tail off in
late trade there.
Japan's Nikkei <.N225> ended up 1 percent and Australian shares <.AXJO>
added 0.8 percent. But South Korean shares <.KS11> fell 0.7 percent
while Chinese stocks took another near 3 percent tumble.
Chinese equities are already down more than 30 percent from their
June highs, and the latest drop came after state media reported that
banks were investigating their exposure to the stock market from
wealth management products and loans collateralized with stocks.
"The market has been struggling to hover above the water with
investors taking to the sidelines to see if stability can be
maintained in the market," KGI Asia director, Ben Kwong, said.
With the dollar flexing its muscles again, commodity markets were
also back under pressure with copper <CMCU3>, considered a
bellwether for global economic activity, trading near a six-year low
at $5,224 a tonne. <MET/L>
The broad Thomson Reuters CRB commodities index <.TRJCRB> hit a
fresh six-year low, while gold was flirting with a 5-1/2-year low at
$1,085 an ounce as its appeal ahead of potentially higher global
interest rates remained in question.
Oil prices, smarting from rising U.S. shale oil output and an easing
of sanctions on Iran, were faring slightly better having bounced on
Wednesday following an unexpectedly large weekly drawdown in U.S.
crude inventories. <O/R>
Front-month Brent crude futures <LCOc1> were pegged at $54 a barrel,
and U.S. crude was up to $48.98 having pulled away from Tuesday's
4-1/2-month low. They have both lost more than 15 percent during
July.
(Additional reporting by Saikat Chatterjee in Tokyo; Editing by
Louise Ireland)
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