Among world markets, Asian indices succeeded in closing their sessions in the green for the third consecutive day. Optimism in Asian markets was partly driven by overnight gains in U.S. stock markets. However, European indices seemed to be struggling to keep up their pace. The Outlook for equities turned sour last week after Britain shocked the world by choosing to leave the European Union, although markets are now showing signs of having digested this event.
BoE Governor to comment on Brexit
U.S. stock futures recorded modest gains ahead of the release of key economic data in the region. S&P 500 INDEX (INDEXCBOE:SPX) Futures opened 0.24% higher at 2,071.75 and NASDAQ (INDEXNASDAQ:NDX) Futures gained 0.20% to 4,371.50.
Markets are expected to focus on comments from Bank of England Governor Mark Carney, who is set to share his thoughts on the way forward for Britain after its decision to leave the European Union. Economic data released earlier today was positive as the U.K. economy grew 0.4% in the first quarter but business investment slumped. Meanwhile, political complexities continue to mount in Britain, where Justice Secretary Michael Gove, has revealed his candidacy to become prime minister.
China will let Yuan fall
On the economic front, weekly jobless claims data to be published today will be key for markets. At the same time, a speech from St. Louis Fed President James Bullard will be key to read the direction of Federal Reserve rate hikes, which will probably be zero for the rest of the year at least.
Some analysts already believe that the market is factoring in the negligible chances of a rate hike this year. China’s central bank, the People’s Bank of China, has announced that it will let the yuan fall 6.8% against the U.S. Dollar (CURRENCY:USD) in 2016. The move is targeted to contain capital outflows and support economic growth on paper alongside exports, at the expense of imports and Chinese consumers.
In commodities, weakness returned in oil prices amidst growing concerns of increased supplies from Nigeria.