Investing.com - Here are the top five things you need to know in financial markets on Thursday, February 4:
1. Oil prices extend gains after Wednesday’s 8% rally
Oil prices extended hefty gains on Thursday, one day after rallying 8% on the back of a broadly weaker U.S. dollar and amid ongoing rumors about a potential deal between Russia and OPEC to cut a global supply glut.
U.S. crude was up 38 cents, or 1.19%, at $32.66 a barrel by 10:50GMT, or 5:50AM ET, while Brent tacked on 28 cents, or 0.8%, to $35.32.
2. Dollar slides to 3-month low on dovish Fed outlook
The dollar index tumbled to a three-month low amid growing skepticism over the Federal Reserve's ability to raise interest rates as much as it would like this year.
The greenback’s sharp losses on Wednesday were triggered after New York Fed President William Dudley said financial conditions have tightened considerably and the weakening global outlook could have "significant consequences" to the U.S. economy.
Data showing that service sector activity in the U.S. grew at the slowest pace in almost two years in January further added to the view that U.S. interest rates will remain on hold.
Market participants no longer expect another rate hike this year, while the Fed, from its forecasts, is anticipating four rate rises in 2016.
3. Global stocks rise as weak dollar, U.S. rate outlook keep oil strong
Asian and European stock markets rose on Thursday as speculation the Federal Reserve might opt to not raise interest rates at all this year hammered the dollar and sparked a huge rally in oil prices.
In the U.S., Wall Street pointed to more gains at the open. The blue-chip Dow futures tacked on 79 points, or 0.48%, the S&P 500 futures inched up 9 points, or 0.45%, while the tech-heavy Nasdaq 100 futures rose 22 points, or 0.52%.
On the data front, the U.S. is to release the weekly report on initial jobless claims at 8:30AM ET, as well as data on nonfarm productivity followed by factory orders data at 15:00GMT, or 10:00AM ET.
4. Bank of England "Super Thursday"
The Bank of England will release its rate decision as well as minutes of its Monetary Policy Committee meeting and its quarterly inflation report at 12:00GMT, or 7:00AM ET. Last month, the Monetary Policy Committee voted 8-1 to keep rates on hold at a record low 0.5%.
Expectations for a rate hike by the Bank of England have been pushed back to late-2016 due to a recent spate of weaker than expected data and amid uncertainty over a referendum on whether or not Britain should stay in the European Union.
5. EU Commission cuts inflation, GDP forecasts
The European Commission estimated on Thursday that euro zone inflation will rise 0.5% this year, down from a previous forecast of 1%, due mostly to the slump in oil prices.
The gross domestic product of the 19-country single currency bloc is expected to expand by 1.7%, compared to its December estimate for growth of 1.8%, citing increased global risks.