There are a couple of highlights when it comes to financial reports today. The first one is the publication of the minutes from the ECB’s most recent monetary policy meeting. Those are supposed to reveal more about whether the regulator is taking the recent spikes in inflation seriously or not. So far, President Lagarde has downplayed them, attributing them to the massive increase in energy prices, which is seasonal and does not reflect long-term trends in the economy.
As is typical of any Thursday, the United States published jobless claims data today. Initial jobless claims were lower than expected by about 20K, which is good news for the US labor market. Continuing claims were also proportionately lower. This, together with a positive ADP report earlier this week, might raise investors’ expectations for tomorrow’s September NFP report.
Another important piece of news for today is that Russia seems ready to increase its natural gas supplies to Europe (and the UK, consequently) to alleviate the current energy crisis there.
The Russian government has been looking for ways to convince EU leaders to speed up the approval of the Nord Stream 2 pipeline, using the present crisis as the perfect opportunity to sway them. The European Union has been torn on the issue, because as much as it fears the crisis, most of its member states do not wish to be dependent on Russia for their energy because it gives Putin too much political leverage.
Still, natural gas prices suffered a massive drop today on the prospect of increased supplies to Europe.
One more crisis appears to have been averted, as Republicans and Democrats in the US Senate are ready to agree on suspending the debt ceiling until the end of the year, preventing the government from going into a default.
These two political developments have contributed to a better mood in the market, so that all major US stock indices today are set to grow.
Sentiment was also boosted by the announcement of a virtual summit between US President Joe Biden and China President Xi Jinping to take place before the year’s end. Investors can now at least hope that the trade-related hostilities between these two countries might improve.
