07.12 - Markets are looking strong, Gold prices drop
Thursday is looking like a positive day for the global economy. Stocks are mostly rising around the globe as sentiment improves. The USD is also on the rise on optimism of tax reform progress. Meanwhile, Bitcoin’s amazing rally continues, the crypto currency is trading close to the 15K level. One the other hand, Gold is losing weight as people go for more riskier assets. Here are the top things to know for today.
Global stock markets were mostly higher, rebounding after two straight days of losses, as appetite for riskier assets improved over optimism the United States would successfully push through tax reforms.
Most Asian-Pacific markets ended higher, as some of the region's technology bellwethers rebounded. Among notable standouts, Japan's Nikkei jumped 1.5%, recouping much of its 2% loss the previous day, which was its biggest fall since late March.
In Europe, most of the continent's bourses were in positive territory in mid-morning trade, following two days of declines, as tech stocks recovered in the wake of a similar move in Asia and Wall Street.
On Wall Street, U.S. stock futures pointed to a higher open, with the tech-heavy Nasdaq futures indicating a gain of 0.4%. U.S. equities finished relatively mixed on Wednesday, with the Nasdaq lifted by an uptick in technology stocks.
The dollar rose to its highest level in two weeks as optimism towards U.S. lawmakers' making progress on tax legislation continued to grow while fears over a potential government shutdown receded.
The U.S. dollar index was at 93.65, the most since November 22.
The Republican-led Senate voted on Wednesday to go to a conference committee with the House to negotiate a plan to reform the tax system, amid early signs that lawmakers could bridge their differences and agree on a final bill ahead of a self-imposed Dec. 22 deadline.
Meanwhile, worries over a potential U.S. government shutdown eased after a bill advanced in the House of Representatives late on Wednesday to extend current federal funding through Dec. 22, with the chamber expected to take up the bill on Thursday.
Congress is facing a deadline of Friday at midnight to pass fresh spending legislation. If they cannot agree on the terms, parts of the federal government could shut down.
Bitcoin rocketed higher, with prices crossing the $15,000-mark just 10 hours after topping $14,000, despite worries about a dangerous bubble and questions about the cryptocurrency's real value.
Bitcoin, which trades 24 hours a day and seven days a week, climbed as high as $15,245 on the U.S.-based GDAX exchange, the most in its nine-year history. It was last at $15,200, up 7.8% on the day
That said, there are often significant price differentials on different bitcoin exchanges, but most showed the cryptocurrency well above the $14K-level.
Prices have been boosted after CBOE Global markets said it will launch trading in futures trading in the cryptocurrency from Dec. 10 after receiving a green light from the Commodity Futures Trading Commission. CME Group will begin initial listings of bitcoin futures contracts on Dec. 18.
Bitcoin, which started 2017 at about $1,000, has risen almost 1,500% so far this year.
Gold prices fell to a 4-month low, as investors shunned safe-haven assets amid optimism on U.S. tax reforms.
Comex gold futures were at $1,257.50 a troy ounce, down $8.70, or about 0.7%, from the last session's closing price. It touched its lowest level since Aug. 8 at $1,256.80 earlier.
Some investors also believe the boost to the economy will prompt the Federal Reserve to raise interest rates at a faster pace.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
- by Roger Gain