wednesday April 6th

6-04-2016

Futures higher as oil rebounds ahead of Fed minutes

U.S. stock index futures indicated a higher open Wednesday with investors reacting to a rebound in the price of oil and some strong data from China. Helping to bolster market sentiment, China's services sector strengthened in March, according to a survey of smaller and medium-sized enterprises released earlier in the day. The Caixin services purchasing managers' index (PMI) for March rose to 52.2, up from February's reading of 51.2. U.S. oil prices built on Tuesday's slight gains, rising over 2.5 percent Wednesday. Nonetheless, Asia markets wavered between positive and negative territory overnight. European markets fared better, posting some gains in the morning session after closing sharply lower on Tuesday evening. Japan's Nikkei 225 was off 17.46 points, or 0.11 percent, at 15,715.36 as the yen retreated from overnight lows to trade near the 110.42 level in the afternoon local time. Chinese mainland markets closed mixed, with the Shanghai composite nearly flat at 3,050.72 and the Shenzhen composite adding 10.60 points, or 0.54 percent, to 1,961.70. Back in the U.S., investors will look out for the minutes of the Federal Open Market Committee's (FOMC) latest meeting for hints on the future path of interest rates and any differing views from inside the Fed. The release is due at 2 p.m. ET. Meanwhile, there'll be more comments from Fed members on Wednesday with Cleveland Fed President Loretta Mester due to speak at 12:20 p.m ET and St. Louis Fed President James Bullard and Dallas Fed President Rob Kaplan due to speak after the closing bell.U.S. stocks closed lower Tuesday, following declines in overseas markets on soft data. The Dow Jones industrial average closed down about 133 points, its first triple-digit loss since March 8. Traders have also been keeping an eye on global bond yields. The German 10-year Bund yield edged toward zero, trading at 0.08 percent Tuesday. U.S. yields also moved lower, and the 10-year was at 1.72 percent Tuesday. Crude futures rose on Wednesday as hopes for an agreement among exporters to freeze output underpinned the market, although persistent global oversupply and Iran's plans to boost production pressured physical oil prices. Oil futures recovered from one-month lows to end the previous session up after Kuwait said there were "positive indications an agreement will be reached" on output during a producer meeting scheduled for April 17 in Qatar. U.S. crude futures were up 77 cents to $36.66 per barrel by 8:43 a.m. ET (1243 GMT), after earlier hitting a session high of $37.15. International Brent futures rose 66 cents to $38.53, off an intraday peak of $38.86. Gold fell 1 percent on Wednesday as a recovery in equities and the dollar prompted some profit-taking after Tuesday's rally, though price moves were muted as traders awaited the minutes of the U.S. Federal Reserve's last policy meeting. Spot gold fell by 0.95 percent to $1,218.90 an ounce, with U.S. gold futures for June delivery down $9.10 an ounce at $1,220.40.