European equities and U.S. futures gained on Thursday as hopes of less aggressive central banks continue to support sentiment.
United States
U.S. markets were closed on Thursday for the Thanksgiving public holiday with equity futures trading higher. E-mini futures for the S&P500 rose 0.26% along with contracts on the Dow Jones 0.16% and Nasdaq100 0.41%.
Europe
The Euro Stoxx 600 gained 0.46% on Thursday along with the DAX 0.78%, CAC 0.42% and FTSE100 0.02% with major benchmarks across the region all higher. The latest policy minutes from the ECB were released on Thursday which showed policy-makers remained worried about inflation becoming entrenched, justifying further rate increases. However, a few officials favoured a smaller increase in October preferring less aggressive increases citing additional tightening measures such as QT. Carsten Brzeski, head of global macro at IGN noted “Recent comments by ECB officials suggest that the discussion at the December meeting will be much more heated and controversial…We currently expect the ECB to hike rates by 50bp in December and by another 25bp in February. The big question will be around quantitative tightening (QT) or in other words, the shrinking of the ECB’s balance sheet”.
*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.
Australia
The ASX is expected to open modestly higher this morning with ASX200 futures up 12 points or 0.17% to 7,265. The index rose 0.14% on Thursday as a 0.93% gain in materials helped to offset a -1.81% fall in energy. Coal stocks slumped after a fall in Newcastle thermal coal futures with both NHC and WHC down -8.8% and -6.7% respectively. WHC CEO Paul Flynn also sold 900k shares for $7.9m, nearly half of his vested interest, also adding to the pressure of WHC’s share price. Shares in retailer Kogan.com climbed 7.87% despite a decline in sales of 38.2% from July to the end of October compared with the same period a year earlier. The comparison is certainly tough given the strong results in the prior COVID year, and the rise in the share price suggests investors were perhaps too pessimistic on the stock. The Australian dollar is 0.49% higher this morning at 0.6766 with the 10-year bond yield 4.5 basis points lower at 3.544%.
Commodities
Oil prices were little changed after the European Union considers a higher-than-expected price cap on Russian crude of between US$65 to US$70 per barrel. WTI crude edged 0.03% higher to US$77.96 while Brent futures were -0.08% lower at US$85.34 a barrel. Iron ore futures in Singapore rose 0.38% on Thursday and are a further 0.88% higher this morning at US$96.55 with copper also 0.33% higher. Gold rose for a third consecutive session up 0.32% to US$1,755.24 an oz, silver was little changed at US$21.53 and Bitcoin rose 0.43% to US$16,543.
Economic data:
- German GDP Final (QoQ Q3) 18:00
- German GfK Consumer Confidence (MoM Dec) 18:00
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3632.
