Investing.com - Here are the top five things you need to know in financial markets on Thursday, June 6:
1. Trump doubles down on tariffs
U.S. President Donald Trump emphasised the need for his tariff policies on both China and Mexico, while insisting that he felt the two countries wanted to make a deal.
Trump said he could increase tariffs on China by “at least $300 billion” and promised he would “do that at the right time”, according to a Reuters report.
The president also tweeted overnight that progress was being made in talks with Mexico and will continue on Thursday. He indicated, however, the progress was “not nearly enough” and confirmed that 5% tariffs would go into effect next week with monthly increases following.
International Monetary Fund Managing Director Christine Lagarde said in an interview with Reuters on Wednesday that, while the IMF did not expect the disputes to lead to a global recession, she did believe they could decelerate growth.
2. Global autos in focus as Fiat-Renault deal breaks down, Ford closes U.K. plant
Automakers were in the spotlight Thursday as Fiat Chrysler (LON:0QXR) withdrew its merger offer with, Renault (PA:RENA) sending shares of the French company sliding more than 7% in European trade.
Fiat blamed the withdrawal on meddling from the French government, who in turn claimed that it was waiting for the “explicit support of Nissan”.
Outside the botched deal, Ford also grabbed European headlines on reports that it would announce later on Thursday plans for the closure of a plant in the U.K. in 2020 due to weakening demand for internal combustion engines.
3. ECB policy decision expected to hold rates steady, Draghi may signal future easing
The European Central Bank is widely expected to leave interest rates unchanged when it announces its policy decision at 7:45 AM ET (11:45 GMT).
But given tame inflation in the euro zone and downside risks from global trade issues, coupled with rate cuts in Australia or signs that the Fed’s next move could be dovish, markets will focus on ECB President Mario Draghi’s press conference for similar signs of future easing.
Among dovish signs to watch for, investors will look to see if the ECB pushes back prior expectations for its first rate hike, adds language to suggest the possibility of lower rates or details on what requirements the central bank is considering for the planned loans to banks.
4. Global stocks mixed as stimulus hopes battle tariff worries
Global stocks registered mixed trade on Thursday as hopes for a new round of stimulus from the Fed was pitted against fears of a tariff-induced global slowdown.
In Asia, China’s Shanghai Composite lagged global counterparts with a 1.2% decline at the close, although Japan’s Nikkei 225 ended flat.
European stocks rose as investors placed bets that the European Central Bank could hint at future signs of policy stimulus. The pan-European Euro Stoxx 50 gained 0.9% by 5:44 AM ET (9:44 GMT).
U.S. futures pointed to a continuation of the Fed-inspired rally, although at a more subdued pace than the prior session. Dow futures gained 75 points, or 0.3%, S&P 500 futures rose 8 points, or 0.3%, while Nasdaq 100 futures traded up 29 points, or 0.4%.
5. U.S. growth, jobless claims in focus
With market focus on the global economic slowdown, the IMF will present its annual review of the U.S. economy in Washington at 10:00 AM ET (14:00 GMT) on Thursday. A pessimistic reading appeared unlikely given Lagarde’s description of a “strong U.S. economy” in her Wednesday interview.
On the data front, attention will centre on weekly jobless claims ahead of Friday’s monthly jobs report. Data from private payroll processor ADP showed Wednesday that job creation hit a nine-year low in May. Despite the worse-than-expected number, markets cheered the “bad news” as fuel for the Federal Reserve to embark on policy easing.