|11 July, 2019

Thursday Outlook: Asian stocks gain; dollar sags on Powell  

U.S. oil futures peak in over a month as an incident in Middle East involving British tanker and Iranian guards highlights tensions

Image used for illustrative purpose. A packet of U.S. five-dollar bills is inspected at the Bureau of Engraving and Printing in Washington March 26, 2015.

Image used for illustrative purpose. A packet of U.S. five-dollar bills is inspected at the Bureau of Engraving and Printing in Washington March 26, 2015.

REUTERS/Gary Cameron

- US oil futures hit their highest in over a month

-Dollar droops as Fed chair sets stage for rate cut

- Asian stocks gain

-Gold prices rose to their highest in over a week

Oil Markets

US oil futures hit their highest in over a month on Thursday as a potential hurricane threatened crude output in the Gulf of Mexico and as an incident involving a British tanker in the Middle East highlighted ongoing tensions.

U.S. West Texas Intermediate (WTI) crude futures were up 11 cents at $60.54 a barrel, after earlier touching the highest since May 23 at $60.63. They gained 4.5 percent in the previous session.

Brent crude futures were down 5 cents, or 0.1 percent, at $66.96 a barrel, after ending Wednesday up 4.4 percent.

Global Markets

Asian stocks gained and the dollar dropped on Thursday after Federal Reserve Chair Jerome Powell reinforced prospects of a U.S. interest rate cut later this month.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8 percent, while Japan’s Nikkei added 0.4 percent. The Shanghai Composite Index advanced 0.8 percent and South Korea’s KOSPI climbed 1 percent.

U.S. stocks ended higher on Wednesday as Federal Reserve Chair Jerome Powell reinforced prospects of an interest rate cut later this month as the US economy is still under threat from disappointing factory activity, tame inflation and simmering trade war, Reuters reported.

The S&P 500 briefly crossed the 3,000-point mark for the first time following Powell’s remarks.

Middle East Markets

Dubai stocks rose sharply on Wednesday as all real estate shares gained, while banks drove the Saudi market higher.

The Dubai index closed 1.2 percent higher with Emaar Properties, its largest listed-developer, surging 3.5 percent to its highest in two months. The Abu Dhabi index edged up 0.1 percent, led by a 1.2 percent rise in Abu Dhabi Commercial Bank, and a 2 percent increase in Aldar Properties.

The Saudi index added 0.6 percent with Al Rajhi Bank rising 0.7 percent and National Commercial Bank increasing 1.4 percent

In Qatar, the index increased 0.5% with Qatar National Bank adding 1.7 percent.

Kuwait's index .BKP was up 0.6 percent, continuing its winning streak for the 10th straight session triggered by an MSCI decision that it would move Kuwaiti equities to its main emerging market index in 2020.

Egypt's blue-chip index declined 0.6 percent with Eastern Company dropping 2.3 percent

Currency

The dollar slipped after Federal Reserve Chairman Jerome Powell set the stage for a rate cut later this month, vowing to "act as appropriate" to ensure the world's biggest economy will be able to sustain a decade-long expansion.

The dollar's index against six major currencies slipped 0.2 percent to 96.877 on Wednesday.

Gold Price

Gold prices rose to their highest in over a week on Thursday as the dollar pulled back from multi-week highs after comments from Federal Reserve Chairman Jerome Powell bolstered expectations for an interest rate cut later this month.

Spot gold was up 0.4 percent at $1,423.80 per ounce, after earlier hitting its highest since July 3 at $1,426.

U.S. gold futures jumped 1.1 percent to $1,427.40 an ounce.

Reporting by Seban Scaria; Editing by Mily Chakrabarty)

 

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© ZAWYA 2019

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