U.S. Stocks were volatile during early pre-market hours, providing a little hint to how the day will unfold today. S&P 500 Futures Index (INDEXCBOE:SPX) slipped 0.05% to 2,042.62 while Nasdaq Futures Index (INDEXNASDAQ:NDX) erased 0.14% to 4,317.75.
Oil up by 2% on Goldman report
A rally in markets is not ruled out though given the direction of oil prices that are up by 2% in today’s trade. Goldman Sachs boosted oil’s outlook by stating that the two-year long oversupply scenario is reversing, which may even lead to a deficit in May. The view is based on several disruptions that happened over the last few months. Goldman also revised U.S. crude price projection upwards to $50 per barrel.
In global equities, Asian indices managed to brush off the impact stemming from China’s weak data that were released over the weekend. However, European counterparts started the week lower, dragged by Chinese economic slowdown concerns. Besides this, the looming referendum on European Union membership for the UK also weighed on sentiment.
China far from stable
China poured cold water on economic recovery hopes as it published weak investment, industrial output, and retail sales data over the weekend. Factory output came in at 6% in April, below estimates of 6.5%. Likewise, fixed-asset investment growth in China slowed to 10.5% year-on-year in April while retail sales paced down to 10.1% during the same period.
The yen traded down today after Japanese Prime Minister, Shinzo Abe, said that a majority of Group Seven countries agree on deploying fiscal policies to bolster growth and inflation. These comments led forex traders to speculate over the early prospects of easing monetary policies in Japan before the G7 summit. Resultantly, investors trimmed their bets on Yen that saw U.S. Dollar (CURRENCY:USD) strengthening throughout the day.
Despite the surge in the greenback, gold prices stayed strong during European trade, underlining increased appetite for safe haven assets.