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At yesterday's stock market close, the Dow Jones Index (US30) decreased by 0.84%, while the S&P500 Index (US500) lost 0.77%. The Nasdaq Technology Index (US100) closed at negative 1.17% on Thursday. Rising US bond yields pressured stocks after 10-year Treasuries rose to their highest in nearly ten months. A strong labor market coupled with hawkish FOMC minutes gives the Federal Reserve more room to keep rates higher.

US weekly initial jobless claims fell by 9,000 to 239,000, showing a stronger labor market than expected at 240,000. The August FRB Philadelphia Business Outlook Survey rose by 25.5 to a 16-month high of 12.0, stronger than expectations of 10.4.

Equity markets in Europe traded lower yesterday. Germany's DAX (DE40) fell by 0.71%, France's CAC 40 (FR40) fell by 0.94% on Thursday, Spain's IBEX 35 (ES35) declined by 0.78%, and the UK's FTSE 100 (UK100) closed at negative at 0.65%.

Due to lower energy prices, the EU trade balance showed a €2 billion deficit in the first quarter of 2023 after a €150 billion deficit in the third quarter of 2022 and a €78 billion deficit in the fourth quarter of 2022.

Norway's Сentral Bank raised its key interest rate by 0.25% to combat high inflation. Norges Bank raised the rate to 4%, the highest level since 2008. The bank said in a report that inflation, which reached 5.4% in July, has eased but remains high and markedly above the 2% target. The head of Norges Bank said the future trajectory of the discount rate will depend on economic developments and added that the rate is likely to be raised again next month.

Oil rose slightly yesterday, supported by an EIA report on Wednesday that showed US crude inventories fell to an 8-month low. Oil was also backed by better-than-expected US economic data on Thursday, which showed the economy's strength supporting energy demand. A negative factor for oil prices is progress in Iran-US relations, which could lead to increased oil exports from Iran. An agreement on Iran's nuclear program could prompt the US and its allies to lift sanctions on Iranian oil exports, increasing global oil supplies.

Natural gas prices are still down due to high inventories caused by weak heating demand during an abnormally mild winter. Last winter's warm temperatures increased natural gas inventories in Europe and the United States. As of August 15, natural gas storage in Europe was 90% full, well above the 5-year seasonal average of 76% for this time of year. Natural gas inventories in the United States as of August 11 are 10.8% above the 5-year seasonal average.

Asian markets were mostly down yesterday. Japan's Nikkei 225 (JP225) decreased by 0.44% yesterday, China's FTSE China A50 (CHA50) added 0.30%, Hong Kong's Hang Seng (HK50) was little changed on the day, and Australia's S&P/ASX 200 (AU200) was negative 0.68% on Thursday. Signals of new stimulus measures from China helped local stocks post gains.

Japan faced a trade deficit last month as exports fell for the first time in more than two years due to slowing growth overseas. Japan's trade deficit totaled 78.7 billion yen ($539 million), the first trade deficit for the world's third-largest economy in two months.

• S&P 500 (F)(US500) 4,370.36 −33.97 (−0.77%)
• Dow Jones (US30) 34,474.83 −290.91 (−0.84%)
• DAX (DE40)  15,676.90 −112.55 (−0.71%)
• FTSE 100 (UK100) 7,310.21 −46.67 (−0.63%)
• USD Index  103.43 +0.00 (+0.00%)
   

Important events for today:

• Japan National Consumer Price Index (m/m) at 02:30 (GMT+3);
• UK Retail Sales (m/m) at 09:00 (GMT+3);
• Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3).

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