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- Global shares and futures traded close to record highs on Wednesday.
- Investors are eagerly awaiting May US payroll data after April's surprisingly weak read.
- Oil rose to two-year highs after OPEC+ confirmed it would continue its supply restriction policies.
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Global shares and futures traded close to record highs on Wednesday as investor attention shifted towards the release of US non-farm payroll data for May, which is due on Friday. Strong May PMI data across the US and Europe, which was widely adjusted upwards compared to the earlier flash release, further boosted markets.
Dow Jones futures were last flat at 3:43 AM E.T., whilst S&P futures were down 0.06%. Nasdaq futures were trading 0.16% lower, suggesting the tech sector may get off to a slightly weaker start later on.
All eyes are on Friday's release of non-farm payroll data for May after many investors were disappointed with April's data, which fell far below expectations. Many workers are still receiving unemployment payment and other benefits that will continue for a few months, meaning companies had fewer potential employees to choose from, according to Michael Hewson, chief market analyst at CMC Markets.
"Nonetheless this week's May payrolls report is still likely to see a decent increase in hiring with around 600,000 jobs set to be added, while the unemployment rate is expected to slip back to 5.9%, after unexpectedly rising to 6.1% in April, after a surprise rise in the participation rate to 61.7%," he said.
US 10 year Treasury yield held steady around 1.614%.
After OPEC+ decided at their meeting on Tuesday that they would maintain their supply policy and continue to restrict oil inflows into the market whilst slowly increasing supply, Brent crude futures reached two-year highs and briefly exceeded $71 in intra-day trading.
On Wednesday morning, Brent crude was last trading at $70.55 per barrel, up 0.43%. WTI crude followed suit and rose by 0.35% to around at $67.96.
"This is not only positive for currencies of oil exporters (NOK, CAD and MXN) but, given that the rising oil price and associated base effects have contributed heavily to the rise in headline CPI inflation so far this year, higher oil prices and the further spillover into CPIs point to even higher prospects for tighter monetary policies.", ING analysts said in a research note.
European stocks rose on Wednesday. The German DAX was last up 0.14% building on Tuesday's record-high close, whilst London's FTSE 100 rose by 0.43% and the Euro Stoxx 50 was trading 0.8% higher.
Positive manufacturing and unemployment data from major European economies including Germany and France, as well as elsewhere around the eurozone lifted benchmark indices.
Asian markets had a mixed day on Wednesday, with the Japanese Nikkei 225 gaining 0.46% whilst Hong Kong's Hang Seng index fell by 0.74% and China's Shanghai Composite closed 0.76% lower.