Lower Open Likely For US Markets, Oil Zooms

Lower open likely for U.S markets Thursday as main stock index futures stood lower in the morning as investors monitored the central bank’s latest policy on interest rates.

A negative open of more than 114 points was apparent when Dow futures crashed 62 points at 3:00 a.m. ET. It was a mixed scene in the S&P and Nasdaq futures.

On economic data, jobless claims will come upon Wednesday. Tencent, Darden Restaurants and Nike will be publishing their latest results.

On Wednesday, Dow closed lower over the dovish policy articulated by the Federal Reserve.

Fed chair Jay Powell said the central bank would not hike rates in 2019, in contrast to two hikes predicted earlier. The news pulled down U.S. Treasury yields and pressured banking stocks and others.

“The Fed was even more dovish than expected and that added to concerns that U.S. growth, and therefore global growth, is hitting a patch of weakness,” commented Kyle Rodda, a market analyst with Melbourne’s IG Markets.

The U.S.-China trade talks also came into focus after President Donald Trump said Washington's tariffs on Beijing would stay for a substantial period of time.

Oil zooms

Oil prices zoomed to the highest in 2019 on Thursday. This followed supply tightening by producer club OPEC and U.S. sanctions against Iran and Venezuela.

International Brent crude oil futures jumped to the November 2018 high of $68.64 per barrel at 0453 GMT, up 14 cents from the last close.

U.S. West Texas Intermediate (WTI) crude futures also neared the November high of $60.27 per barrel on Thursday.

“Venezuelan exports to the U.S. have finally dried up, after the sanctions by the U.S. the administration” noted ANZ bank.

The U.S. crude oil stockpiles also fell nearly 10 a million barrels, highest since July, by strong exports and refining demand, according to the data of Energy Information Administration.

Gold at a high

Meanwhile, gold peaked to a three-week high on Thursday as the Federal Reserve ruled out interest rate this year. A surprise cut in U.S. growth forecast escalated concerns on global economic slowdown.

“U.S dollar is well off its highs from yesterday and the Treasury yields are coming down which means going into bonds or assets of that nature yields less and gold becomes more attractive,” noted Kyle Rodda, a market analyst with IG Markets. When the dollar weakened, gold emerged as the asset against risks.

Asian shares rise

Asian shares jumped Thursday after the U.S. Federal Reserve announced pause on interest rates hikes in 2019.

In mainland China, Shanghai composite soared 0.35 percent and the Shenzhen component added 0.706 percent.

South Korea’s Kospi closed 0.36 percent higher. But Hong Kong's Hang Seng index slipped 0.85 percent at the final hour of trading. Japanese stock markets were closed on Thursday on account of a holiday.

European stocks traded lower Thursday after the U.S. Federal Reserve turned more accommodative. The pan-European Stoxx 600 slipped 0.15 percent in early morning deals and most sectors turned negative.