The financial markets calmed a bit on Thursday as oil prices declined and equity indexes regained their composure.
As Wall Street did on Wednesday, exchanges in Asia and Europe were encouraged by upbeat employment figures from the United States, which helped deflect some attention from worries about the impact of fighting in Libya on its oil production. The monthly survey from the ADP payrolls firm raised the optimism ahead of Friday’s report from the Labor Department, which often sets the market tone for a week or two after its release. ADP’s finding that private companies added 217,000 jobs in February, well above the 180,000 analysts had predicted, has ratcheted up expectations about Friday’s figures. The consensus before the ADP survey was that American employers added around 175,000 jobs. Some analysts now think the actual figure could be up around the 250,000 mark.
“Bullish investors will be hoping the trend continues today,” a senior sales trader at IG Index, Yusuf Heusen, said.
Oil prices fell amid talk of an effort toward a mediated resolution to the conflict in Libya. Since the fighting started, crude supplies from Libya, a member of the Organization of Petroleum Exporting Countries, has been cut more than half. Benchmark crude for April delivery was down $1.24 at $100.99 a barrel in electronic trading in New York. In London, Brent crude for April delivery was down $1.79 to $114.56 a barrel.
Equity indexes were higher. The FTSE 100 in London was up 1.4 percent, while the DAX in Frankfurt rose 1.5 percent. The CAC 4o in Paris was 1.5 percent higher.
Futures trading indicated that Wall Street was poised for a solid opening after Wednesday’s modest gains.
How Wall Street performs may hinge on some economic reports to be released Thursday. Particular focus will center on the weekly jobless claims data as well as the monthly non-manufacturing survey from the Institute for Supply Management. It is not just the United States in focus though. In Europe, all eyes have been on the monthly policy meeting of the European Central Bank.
The central bank kept its main interest rate unchanged at the record low of 1 percent, but investors will be interested to see if the bank’s president, Jean-Claude Trichet, sounds a more hawkish tone over inflation in his news conference.
If he does, then the markets may move to price in a swifter-than-anticipated interest rate increase. Now the prevailing view is that there will not be a rate increase until the fourth quarter, even though inflation is running at 2.4 percent, above the bank’s goal of “close to but below” 2 percent.
“Given the problems in Europe, any decision on rates is unlikely at today’s rate meeting but of particular interest will be the tone of Trichet’s press conference and the bank’s outlook for inflation and growth forecasts going forward into 2011,” a market analyst at CMC Markets, Michael Hewson, said.
In Libya, the fighting has shut down oil production in many parts of the country. While Libya’s oil fields produce only about 2 percent of global demand, experts say the disruption is putting pressure on world supplies. The International Energy Agency said Wednesday that a power struggle had cut up to 1 million barrels per day of crude production, more than the group’s previous estimate of as much as 750,000 barrels per day. constitucion de empresas dominicana Coupled with concerns that uprisings in the Arab world, which have already brought down the leaders of Tunisia and Egypt, could spread to other oil-rich countries in the Middle East, oil prices remain at elevated levels.
Earlier in Asia, Japan’s Nikkei 225 stock average climbed 0.9 percent to 10,586.02. Hong Kong’s Hang Seng index was 0.3 percent higher to 23,122.42 but mainland Chinese shares fell on profit taking. The benchmark Shanghai Composite Index lost 0.4 percent to 2,902.98, while the Shenzhen Composite Index lost 1.6 percent to 1,272.00.