© Reuters
| By Jeffrey Smith, Investing.com |
The European Central Bank met with the aim of determining the exit path from a period of nine years of negative interest rates. The price of natural gas has skyrocketed, after a fire cut off use of a liquefied natural gas export terminal in Texas.
Regulators in China are exploring the possibility of authorizing the fintech group Ant Group, headed by Chinese billionaire Jack Ma, to issue itself after all, while the airline Spirit Airlines Rejects a vote by its shareholders on its merger proposal with Frontier Airlines.
And the price of oil has fallen from its peak level, following news of a new preventive closure in part of Shanghai. Here’s what you need to know in the financial markets on Thursday, June 9th.
1. The European Central Bank outlines the path to a negative interest rate
The European Central Bank is meeting, with an unenviable task ahead of it – curbing the spreading inflation without eliminating the economic recovery, which seems increasingly fragile since Russia’s invasion of Ukraine.
The previous briefing suggested that the central bank, based in Frankfurt, would officially stop its net asset purchases at the end of the current month, paving the way for two increases of 25 basis points each in the next two Central Bank meetings in July and September.
European Central Bank President Christine Legard will have to be careful at her press conference, when she talks about possible steps to keep government bond margins within acceptable limits, while the bank tightens its policy.
All of the ECB’s previous programs to control spreads have added liquidity to the financial system – the opposite of what is needed in the current inflationary situation.
2. The price of gas is skyrocketing in Europe, reaching a low in the US following the burning of a liquefied natural gas terminal
Price fluctuates widely following a fire at a Texas liquefied natural gas export terminal.
Prices in the UK soared, after a critical alternative to the Russian gas pipeline fell out of use, apparently for at least three weeks.
On the contrary, the price in the US (Henry Hub) continued to fall in overnight trading on Wednesday, due to the expectation that more gas will remain “imprisoned” in the US market, thus increasing domestic supply.
The demand for liquefied natural gas in Europe has been a major factor in the rally in futures contracts for natural gas in the last three months, along with the reluctance of oil shale producers to produce more oil (a process from which natural gas is also produced) linked).
3. Stock markets are moving in moderate volatility ahead of the publication of the US Unemployment Claims Report; Spirit airline merger in focus
U.S. stock markets will open with a cautious rise, moving in moderate volatility amid a lack of economic news flow and on companies.
As of Thursday afternoon, it had risen 82 points, or 0.3%, while also gaining 0.3%, climbing 0.4%. In the bond market, short-term yields have risen slightly, but U.S. government benchmark bonds have remained unchanged.
Shares expected to be in focus later today include the share of Spirit Airlines (NYSE :), which postponed the critical vote of its shareholders, and the merger with Frontier Group (NASDAQ 🙂 on Wednesday, in order to give further thought to the competitor’s latest offer Its, JetBlue (NASDAQ :).
Also at the center will be the stock of global pharmaceutical giant Abbott (NYSE :), after new revelations regarding its knowledge of problems in the supply chain of baby food from its products.
The U.S. Weekly will be published later Thursday, topping a relatively thin line of reports in the economic calendar.
4. Jack Ma’s Ant group will issue itself after all?
Signs of a resurgence of Chinese technology stocks continue to grow. Bloomberg reported that Beijing is in talks with financial services giant Jack Ma’s Ant Group, with the aim of reviving the initial public offering (IPO), which was cut short by hostility.
Ant’s IPO was the moment that marked a year of harsh regulatory criticism against China’s technology sector, whose financial and economic power began to worry the Communist Party, and can be said to have been the biggest catalyst for its business partner’s surprise crash, the online platform Alibaba (NYSE :).
Alibaba’s U.S. Depository Receipts (ADRs), which had already recorded significant gains earlier this week, amid signs of regulatory easing in China over other technology companies, rose another 2.6% in early trading, on the way to a four-month high.
5. The price of crude oil is moving in moderate volatility following the news from Shanghai, an increase in US inventories
Oil prices are fluctuating moderately, but remain close to recent highs, after a U.S. government report last week confirmed a surprising increase in U.S. inventories, both of crude oil and refined products. Renewal of a preventive closure in parts of Shanghai contributed to the weakness.
As of Thursday afternoon, the price of futures on retreated 0.2%, to $ 121.83 a barrel, while falling 0.2%, to $ 123.35 a barrel.
The negative trend of both types of oil seems limited, as long as inventory remains at its current low level. U.S. commercial inventory will be sufficient for only 58 days of consumption, based on weekly demand data, compared to 73 days a year ago.
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