Here are the top five things you need to know in financial markets on Thursday, January 18:
1. Global Stock Market Rally Showing No Signs of Slowing
The rally in global stock markets showed no signs of slowing, as optimism for continued strong global growth and improving corporate earnings supported appetite for riskier assets.
Most major indexes in Asia closed higher, aided by strength in regional tech companies. Among notable standouts, Japan’s Nikkei reached its strongest level since late 1991 earlier before ending down around 0.4%.
In Europe, the majority of the continent’s bourses got off to an upbeat start, as investors monitored the release of fresh corporate earnings.
On Wall Street, U.S. stock futures pointed to a flat open as investors kept an eye on earnings from the likes of Morgan Stanley (NYSE:MS), IBM (NYSE:IBM) and American Express (NYSE:AXP).
U.S. stocks jumped on Wednesday and the Dow closed above 26,000 for the first time as investors’ expectations for higher earnings lifted stocks across the board.
2. Dollar Stays on the Backfoot, 10-Year Bond Hits 2.6%
The U.S. dollar failed to see much of a bounce back from recent lows, as investors kept an eye on upcoming U.S. data to gauge if the world’s largest economy is strong enough to withstand multiple rate hikes in 2018.
The Commerce Department is to publish a report on building permits and housing starts for December at 8:30AM ET (1330GMT).
Besides the housing-related data, Thursday’s calendar also features a survey on manufacturing conditions in the Philadelphia region as well as weekly jobless claims figures.
The dollar index, which gauges the U.S. currency against a basket of six major rivals, was down 0.2% at 90.45, not far from Tuesday’s three-year low of 89.98.
Meanwhile, the U.S. 10-year Treasury yield rose above the 2.6%-level for the first time since March, reaching an overnight high of 2.615%.
The majority of economists believe that the Fed will hike rates in March, followed by another hike in June, with a third move higher arriving in December, according to Investing.com’s Fed Rate Monitor Tool.
3. Oil Prices Tread Water Ahead of EIA Weekly Supply Report
Crude prices were largely unchanged as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 11:00AM ET (1600GMT), amid analyst expectations for a decline of 3.5 million barrels.
Gasoline inventories are expected to rise by 3.4 million barrels while stocks of distillates, which include heating oil and diesel, are forecast to increase by 8,600 barrels.
The report comes out one day later than usual due to the Martin Luther King Day holiday.
U.S. West Texas Intermediate crude futures was at $6398 per barrel, while Brent futures were at $69.36 per barrel.
4. China GDP Beats Expectations
Data out of Asia’s largest economy lent the global growth story more momentum after a report showed that China’s GDP grew faster than expected in the fourth quarter, helped by a rebound in the industrial sector, a resilient property market and strong export growth.
Economic growth in the October-to-December period from a year earlier was 6.8%, the National Bureau of Statistics said, unchanged from the third quarter and above analyst expectations for 6.7% growth. Growth for the 2017 full year picked up to 6.9% year-on-year, the first annual acceleration for the economy since 2010.