MARKET WRAPS
Watch For:
Manufacturing PMI data for EU, Germany, France, Italy; trading updates from Standard Chartered, Shell, ING, Maersk, Orsted, Hugo Boss, Pandora
Opening Call:
Shares could start out mixed in Europe on Thursday. In Asia, stock benchmarks were also mixed; Treasury yields were mixed; the dollar consolidated; while oil and gold ticked higher.
Equities:
European shares seem set to open mixed on Thursday, as investors digest the Federal Reserve's comments, which appear less hawkish than what markets were expecting.
The Fed kept rates at their highest level in more than 20 years, but said it was more likely to keep interest rates at their current level for longer than to raise them again.
"They are sticking to their story until they get enough information that they have to shift," said William English, a former senior Fed economist who is a professor at Yale School of Management.
Investors will now shift attention to a slew of upcoming economic data including the U.S. April non-farm payrolls data on Friday.
Forex:
The dollar consolidated in Asia after the Fed held interest rates at their highest level in two decades and acknowledged recent inflation setbacks.
CME data shows that investors mostly expect rates to remain unchanged for the next three meetings.
Economists surveyed by The Wall Street Journal see weekly jobless claims tomorrow increasing to 212,000 from 207,000 and April payroll gains on Friday slowing to 240,000 from March's 303,000.
Bonds:
Treasury yields were mixed in Asia after the Fed confirmed expectations of another hold and as Chair Powell stuck to the data-dependency rhetoric while avoiding indicating another interest rate increase is in the cards.
The Fed's decision to slow the pace of balance sheet reduction "will likely put less upward pressure on bond yields," Carson Group said.
It added that interest-rate cuts remain unlikely for as long as inflation stays elevated.
Energy:
Oil prices were higher in Asia in a likely technical rebound after recent weakness and the Fed's less-then-expected hawkish remarks.
The fading of geopolitical risk premium and signs of weaker demand on rising U.S. crude stockpiles have weighed on oil prices lately, ANZ Research said.
However, commodities "markets found some support after the Fed left the prospect of rate cuts on the table," it added.
Metals:
Gold prices rose after the U.S. Fed's remarks overnight were less hawkish than expected.
Gold continues to be a desirable home for money through the second half of the year, the World Gold Council said.
Gold buying by the People's Bank of China is also expected to continue, serving as a store of value amid weaker local currencies.
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Copper was higher in a likely technical correction after settling lower overnight, as tempered expectations over U.S. interest-rate cuts weighed on metals.
The outlook for copper still seems upbeat.
The metal is up over 10% over the past month, reflecting improving demand and further supply tightness, ANZ Research said.
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A planned U.S. ban on Russian uranium is "a definite tailwind" for prices of the nuclear fuel, Citi said.
The Senate passed legislation to ban low-enriched uranium from Russia this week.
Still, it isn't clearly known how the ban will be implemented and waivers for enriched uranium products could create a loophole for imports, Citi said.
TODAY'S TOP HEADLINES
Fed Chair Jerome Powell Projects Optimism, But Inflation Data Are in the Driver's Seat
Federal Reserve Chair Jerome Powell tried to keep the central bank's options open Wednesday by sticking with his view that interest rates are restrictive and that inflation was likely to resume its decline.
But a string of disappointing readings on price and wage pressures have led investors to put less weight on the central bank's outlook and more attention on how the economic data unfold.
Fed Says Inflation Progress Has Stalled and Extends Wait-and-See Rate Stance
WASHINGTON-The Federal Reserve acknowledged a recent setback in its inflation fight but said it was more likely to keep interest rates at their current level for longer than to raise them again.
Officials held their benchmark federal-funds rate steady Wednesday at a range between 5.25% and 5.5%, the highest in two decades and a level it reached last July, following a run of economic data that revealed simmering price pressures in the economy.
Stalled Inflation Vexes the Fed. Is It Noise or a New Trend?
Explaining why underlying inflation fell steadily from its pandemic peak of over 5% in 2022 to under 3% at the end of last year is straightforward: improved supply, softer demand and well-anchored inflation expectations.
Explaining why it stalled in the first quarter is a lot harder. The fundamentals still look good: Supply and demand are coming back into balance, at least in the labor market, and inflation expectations have edged lower.
BP Goes Deeper Into Gulf of Mexico, After Triumphs and Tragedy
THUNDER HORSE OIL PLATFORM-This hulking production base 150 miles offshore from New Orleans has long embodied BP's outsize ambitions in the Gulf of Mexico and also reflected its recurring setbacks.
Stretching roughly three football fields and pumping crude from more than a mile below the water's surface, Thunder Horse in 2005 was found listing so precariously that it appeared in danger of sinking.
Rio Tinto Declines Comment on Whether Considering Rival Anglo American Bid
The chair of Rio Tinto on Thursday declined to comment on whether the world's second-largest miner by market value is weighing a bid for Anglo American, the target of a recent $39 billion bid by BHP Group.
"We don't speculate or comment on M&A activity," Dominic Barton said in response to a question at a shareholder meeting on whether Rio Tinto is considering a takeover proposal for London-listed Anglo American.
European Oil Companies Weigh U.S. Listings to Boost Their Stock Prices
European oil-and-gas companies have rarely beaten their American counterparts in stock performance over the past few years. Now, the thinking goes, it may be time to join them-at least in terms of the location of their stock listings.
TotalEnergies CEO Patrick Pouyanné told analysts on the company's earnings call on Friday that it is considering moving its primary stock listing from Paris to New York. TotalEnergies' board asked Pouyanné to look into it, he said, and the company plans to make a decision by September.
Tesla Is Pulling Back From EV Charging, and People Are Freaking Out
Tesla's move this week to lay off much of the team responsible for creating the largest and most successful electric-vehicle charging network in the U.S. threw the industry into a state of shock and confusion.
The layoffs halted construction work at a dozen Supercharger sites in Texas. In New York, property owners in negotiations with Tesla were left hanging as discussions about adding chargers to their sites were ongoing.
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Expected Major Events for Thursday
06:30/SWI: Mar Retail Sales
06:30/SWI: Apr CPI
07:00/POL: Apr Poland Manufacturing PMI
07:00/TUR: Apr Turkey Manufacturing PMI
07:15/SPN: Apr Spain Manufacturing PMI
07:30/CZE: Apr Czech Republic Manufacturing PMI
07:30/SWI: Apr procure.ch Purchasing Managers' Index
07:45/ITA: Apr Italy Manufacturing PMI
07:50/FRA: Apr France Manufacturing PMI
07:55/GER: Apr Germany Manufacturing PMI
08:00/ITA: Mar PPI
08:00/EU: Apr Eurozone Manufacturing PMI
09:00/CYP: Mar Retail trade
09:00/GRE: Mar Labour Force Survey
09:00/CYP: Apr CPI
10:00/POR: Mar Industrial production index
12:30/CZE: Czech interest rate decision
15:00/DEN: Apr Foreign Exchange & Liquidity
16:59/AUT: Apr Unemployment figures
23:01/UK: Apr BRC-Sensormatic IQ Footfall Monitor
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
05-02-24 0016ET
