Investing.com - Here are the top five things you need to know in financial markets on Wednesday, March 8:
1. China posts 1st trade deficit in 3 years
China unexpectedly reported its first trade deficit in three years in February as imports surged much more than expected and exports registered a surprise decline.
Chinese imports jumped 38.1%, the biggest annual increase since February 2012 and exports unexpectedly dropped 1.3% leaving the world’s second largest economy with a trade deficit of $9.15 billion.
While the data reflected the view that economic activity in China picked up in the first two months of 2017, analysts warned that it may be skewed due to the Lunar New Year celebrations that began in January this year, but happened in February 2016.
2. Fed hike all but certain
Market players seemed to be in a wait and see mode ahead of Friday’s employment report as the labor market data will be the last major report capable of swaying the Federal Reserve’s (Fed) apparent posture to return to the path of removing accommodative monetary policy.
A string of remarks from policy makers since the end of February have spiked the odds for a rate hike from near 20% to above 80%, according to Investing.com’s Fed Rate Monitor Tool.
Back then, out of the 23 primary dealers that trade with the central bank, only Jefferies had forecast that the Fed would move in March.
As a precursor to the official data at the end of the week, market players will digest ADP’s February’s nonfarm employment change at 8:15AM ET (13:15GMT) Wednesday with expectations for the creation of 190,000 jobs.
Gold retreated on Wednesday, sliding to a five-week low, as investors continued to bet on the Fed tightening policy.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
The dollar index was last up by 0.10% at 101.91 by 6:01AM ET (11:01GMT).
3. Global stocks in holding pattern ahead of central bank decisions
Global equities remained in a holding pattern near record highs as investors waited for key labor market data from the U.S. and seemed reluctant to place big bets ahead of monetary policy decisions.
U.S. futures pointed to a flat open as market players remained on edge ahead of next week’s Fed policy decision. Specifically, at 6:02AM ET (11:02GMT), the blue-chip Dow futures slipped 0.07%, S&P 500 futures edged down 0.06% and the Nasdaq 100 futures were unchanged.
Meanwhile, European equities edged forward on Wednesday as investors also waited for indications on monetary policy. The European Central Bank (ECB) will announce its policy decision on Thursday.
Earlier, Asia closed mostly lower as Chinese trade data failed to overcome risk off attitude and the DJ Shanghai index dropped 0.1%. Japan’sNikkei 225 led the losses after fourth quarter GDP figures disappointed consensus.
4. Oil drops on bets for bearish U.S. supply data
Oil prices were under pressure on Wednesday, nearing a four-week low after data overnight showed another massive increase in U.S. crude supplies.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by a whopping 11.6 million barrels in the week ended March 3, surging past expectations for a build of just 1.6 million.
The U.S. Energy Information Administration will release its official weekly oil supplies report at 10:30AM ET (15:30GMT) Wednesday.
U.S. crude oil futures fell 0.81% to $52.71 at 6:03AM ET (11:03GMT), while Brent oil traded down 0.66% to $55.55.
5. Japan expands for fourth straight quarter
Japan’s gross domestic product (GDP) expanded for a fourth straight quarter in the final three months of 2016, according to data released on Wednesday.
Although the data was revised up to show a larger expansion that originally thought, it still disappointed consensus forecasts.
The world’s third largest economy grew an annualized 1.2% in October-December, less than the median estimate for 1.6% annualized growth although more than the preliminary reading of a 1.0% annualized expansion.
The figure translates into quarter-on-quarter growth of 0.3%, versus a preliminary reading of 0.2 %growth and the median estimate for 0.4% growth.