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Stocks stumble, dollar stands tall as U.S. payrolls loom
Stocks made a meandering start to the second half of 2021 on Thursday, dipping in Asia on worries about new coronavirus infections and fresh lockdowns, while bond markets were on edge and the dollar crept higher ahead of U.S. labour data.
Equity futures pointed to a small bounce in Europe, after a month-end selloff, with Euro Stoxx 50 futures up 0.4%, while FTSE futures rose 0.1% and S&P 500 futures trod water at record high levels and were last up about 0.15%.
In an Asia session thinned by a holiday in Hong Kong, Japan’s Nikkei fell 0.3% and MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4%.
The U.S. dollar edged up to a four-month high of $1.1839 per euro and a 15-month high of 111.18 yen.
“The virus is still playing a role … although it’s difficult to see much direction in anything at the moment,” ING economist Rob Carnell said on the phone from Singapore.
The dollar hit a fresh 15-month high versus the yen and hovered near multi-month peaks against other major peers on Thursday, ahead of a key U.S. jobs report that could offer clues on when the Federal Reserve will start to pare back stimulus.
The U.S. currency rose as high as 111.165 yen for the first time since March 26, 2020, before trading essentially flat compared to Wednesday at 111.095.
The dollar index, which measures the greenback against six counterparts, held just below a 2 1/2-month top of 92.451 reached the previous session, edging up on the day to 92.415.
The index posted its best month since November 2016 in June, driven by the Federal Open Market Committee (FOMC)’s surprise hawkish shift in the middle of that month, when policymakers signalled two interest rate hikes by the end of 2023.
Oil prices inch up ahead of OPEC+ decision on supply cuts
Oil prices edged higher on Thursday, supported by lower U.S. inventories, as investors waited for a decision from key producers on whether they would maintain or ease supply cuts in the second half of the year.
Brent crude for September gained 15 cents, or 0.2%, to $74.77 a barrel by 0629 GMT the U.S. West Texas Intermediate crude for August was at $73.69 a barrel, up 22 cents, or 0.3% close to its highest since 2018 of $74.45.
WTI rose more than 10% in June while Brent added over 8%, touching highs since 2018, as more people vaccinated against COVID-19 and summer travel picked up.
Analysts had forecast a larger supply deficit globally in the second half of the year as the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, maintained production cuts while demand rises.
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