Here are the top five things you need to know in financial markets on Wednesday, March 30:
1. Global stocks bounce on dovish comments from Fed chair Yellen
With the exception of Nikkei 225, global stocks followed Wall Street higher on dovish comments from Federal Reserve (Fed) chief Janet Yellen who directly opposed a recent batch of hawkish remarks from several Fed officials insisting that it was appropriate for policymakers to proceed “cautiously”.
The speech given to the Economic Club of New York on Tuesday eased concern over imminent rate hikes and even caused analysts at Citigroup (NYSE:C) to cut back their forecast to just one increase this year explaining that Yellen was an “uber dove”.
2. Oil rebounds on speculation of small build in stockpiles
Oil rebounded on Wednesday from a more than two week low after data from industry group the American Petroleum Institute showed that inventories likely rose by 2.6 million barrels last week. Although the increase marked a new record high, the build was lower than the 3.3 million barrels forecast by analysts.
The U.S. Energy Information Administration will publish its crude inventory report on Wednesday at 14:30GMT, or 10:30AM ET.
U.S. crude oil futures rose 1.62% to $38.90 at 9:54AM GMT or 5:54AM ET, while Brent oil gained 1.23% to $40.34.
3. ADP employment report in focus ahead of government data
Investors will pay close attention to the only relevant data point stateside on Wednesday, the ADP nonfarm employment change for March.
The consensus expects the creation of 194,000 jobs, down slightly from the prior 214,000, in what will be the final indicator before the publication of the official government data on Friday.
4. ECB insists it has tools while waiting for German inflation
European Central Bank (ECB) member Benoit Coeure said on Wednesday that negative interest rates were not the main instrument of euro area monetary policy.
“And looking ahead, we’re not short of instruments”, Coeure stated in an interview with Politico. “Our choice is quite large,” he added.
Nonetheless, Coeure did openly state that the ECB council was not discussing the use of “helicopter money”.
The remarks came ahead of the publication of the German consumer price inflation (CPI) data to be released at 12:00GMT, or 8:00AM ET. The CPI from the euro area’s largest economy is a key indicator for the inflation situation throughout the bloc.
5. British government under pressure as Tata Steel pulls out of U.K. operations
The British government was busy studying options to save its steel industry on Wednesday after the Indian firm Tata Steel announced it would sell off all of its U.K. operations, including Port Talbot, in a move that threatened thousands of jobs.
U.K. business minister Anna Soubry said the British government would not rule out any options, including temporary state control, in an attempt to safeguard employment and avoid the demise of its steel industry.