Global stocks gain after US jobs and oil demand data fuel economic optimism ahead of the Bank of England rate decision
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- Stocks were boosted by positive economic data and rising oil prices signalling economic rebound.
- European investors are anticipating the Bank of England's policy decision and potential taper talk.
- US index performance was broadly muted the previous day after Joe Biden encouraged intellectual property rights waivers for the COVID-19 vaccine.
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Global stocks rose on Thursday after positive US employment data, improving oil demand and positive earnings reports fueled investor optimism about economic recovery. European investors especially were awaiting the Bank of England's interest-rate decision, although analysts did not expect any major changes to monetary policy.
US stock futures rebounded after a subdued trading close on Wednesday after President Biden expressed support for intellectual property waivers for the COVID-19 vaccine.
"US stocks are rising after solid economic data, calm in the bond market, and as the global economic recovery improves. A private payroll report and a couple of Service index readings suggest the US economic recovery continues but not at a breakneck pace." Edward Moya, senior market analyst at OANDA commented on Wednesday's market performance.
The positive sentiment carried on early on into Thursday morning. S&P 500 futures were last up 0.23%, Nasdaq futures were up 0.38% after falling for the seventh consecutive day on Wednesday and Dow Jones futures were up 0.2%, building on the record highs the Dow reached the previous day.
US 10-year Treasury yields fell after Treasury Secretary Janet Yellen and various Federal Reserve speakers provided reassurance about inflation. They were last at 1.566%, down 1.6 basis points.
European markets also made gains ahead of the Bank of England's policy decision.
"We can expect the bank to raise their growth as well as inflation forecasts for a start, given the strength of recent economic data, and the positive outlook for Q2.", Michael Hewson, chief market analyst at CMC markets said. "No changes to monetary policy are expected, but we could start to see some taper talk," he said.
The pound was last up 0.1% against the dollar and up 0.3% against the euro, ahead of the central bank decision.
London's FTSE 100 was last up 0.13%, Frankfurt's DAX rose by 0.3% and the cross-European Euro Stoxx 50 was almost flat, up 0.07% on Thursday.
Crude oil fell, losing some momentum after US inventory data sent prices surging on Wednesday. Brent crude contracts were last trading at $65.17 per barrel, down 0.67% and WTI futures were priced at $68.56, down 0.58%. Both contracts briefly hit two-month highs after data showed steep drawdowns of fuel, which suggests oil demand is picking up.
"Oil prices have come under pressure in the past 24 hours and it looks like a healthy pullback following a sudden surge, rather than the beginning of a correction." Milan Cutkovic, Market analyst at Axi said.
Asian markets saw mixed performance overnight after a series of bank holidays as the Japanese Nikkei 225 closed 1.8% up and Hong Kong's Hang Seng was up 0.54% but China's Shanghai Composite fell 0.16%. China had progressed its economic rift with Australia by discontinuing economic talks with the country, with no indication as to when they might resume.
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