U.S. stock futures registered early gains in the pre-market hours after booking solid gains during the previous session. S&P 500 Index (INDEXCBOE:SPX) Futures surged 0.30% to 2,114.50 and Nasdaq (INDEXNASDAQ:NDX) Futures gained 0.36% to 4,541.88.
Central Bank actions
Global markets rejoiced after Federal Reserve Chair Janet Yellen refrained from specifying a definite time frame for hiking rates this month. Both Asian and European equities surged, driven by oil prices and upbeat data in the Eurozone. Germany’s industrial production surpassed market estimates while Eurozone first quarter growth has been revised upward.
In other developments, the People’s Bank of China posted foreign exchange reserve data which fell to five-year lows. China’s forex reserves slipped to $3.19 trillion in May, falling by $27.08 billion. The drop in foreign exchange reserves is largely attributed to the Yuan’s weakness against the U.S. Dollar (CURRENCY:USD).
Meanwhile, the Reserve Bank of Australia has kept rates unchanged at a low of 1.75%, which has strengthened hopes that central banks will continue to be accommodative in their monetary measures. Due to the absence of any key economic data, traders will closely watch for the World Bank’s global economic outlook later today.
Oil and gold diverge
Oil prices dominated the commodity segment by surging to eight-month highs following reports of extended global supply disruptions. Attacks in Nigeria affecting its oil supplies coupled with expectations of a decline in U.S. crude stockpiles boosted sentiment. The American Petroleum Institute will publish a new inventories report today. Buying interest in SPDR Gold Trust (ETF) (NYSEARCA:GLD) remained subdued as investors were cautious ahead of a flurry of important economic data during upcoming weeks.
In currencies, the dollar fell sharply against the British pound after Brexit polls showed that only a very slim majority of voters oppose Britain’s exit from the European Union.