Oil And U.K. Manufacturing Growth Uplift U.S. Markets

Andy Parker
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Oil And U.K. Manufacturing Growth Uplift U.S. Markets

The sentiment across U.S. markets appeared positive during early hours as stock futures added gains following weak trade yesterday. The key factors that could fuel a rally in the U.S. today are the bounce back in oil prices alongside positive growth in U.K. manufacturing and industrial production.

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Markets recover

While Asian markets closed broadly lower today due to renewed concerns of a slowdown in China after weak trade numbers, European markets erased early morning losses to return to positive. A rally in oil started after reports emerged that OPEC and non-OPEC members are scheduled to meet on March 20 to discuss the scope of freezing output.

Meanwhile, a report from the American Petroleum Institute disclosed that stockpiles in the U.S. rose 4.4 million barrels during the last week ended on March 4, 2016. The market is closely watching for an update from the U.S. Energy Information Administration.

Policy rates

Apart from this, the markets will be guided by the rate policies of the European Central Bank and the Bank of Japan. So far, there are increased hopes that the ECB will cut deposit rates by 10 basis points and rev up its asset purchase program by an additional €10 billion. On the other hand, sources close to the Bank of Japan revealed that the bank might not cut rates but could provide some stimulus through asset purchases. Meanwhile, market participants have projected that the Bank of Canada will leave interest rates unchanged in its meeting today.

In the Eurozone, optimism over improved growth in U.K. manufacturing and industrial production has been offset by a cut in growth forecasts by France and Germany. Manufacturing output in U.K. appreciated 0.7% month-on-month during January, widely higher than expectations of a 0.2% increase.

In Asia, China has announced a cut in its custom fees after it reported discouraging trade data yesterday. In early trading hours, S&P 500 Futures are trading up by 10 points to 1,991 while Nasdaq Futures are up 0.54% to 4,293.50.