Investing.com - Here are the top five things you need to know in financial markets on Thursday, January 4:
1. Jobs data centers attention
While traders wait for the publication of the U.S. monthly nonfarm payrolls on Friday, they’ll digest other tidbits showing the state of American labor market on Thursday.
ADP will release its own monthly employment report at 8:15AM ET (13:15GMT) with consensus looking for the creation of 191,000 jobs. While the report from the private payroll processor is not considered a reliable indicator of the government’s own numbers, it still provides a solid indicator of tendencies in the U.S. job market.
15 minutes later, market participants will also observe the latest reading of weekly jobless claims with expectations pointing to 241,000 new applicants for unemployment subsidies.
2. Dollar breaks 5-day losing streak in modest recovery
While waiting for the aforementioned data, selling returned to the dollar on Thursday after a short-lived recovery a day earlier.
Robust U.S. manufacturing and construction data out on Wednesday briefly broke a five-session losing streak in the greenback, while minutes from the Federal Reserve’s December meeting also lent support.
The major focus centered on the fact that Fed officials discussed whether tax cuts could require them to raise interest rates at a faster pace in 2018 than last year.
"Most participants indicated that prospective changes in federal tax policy were a factor that led them to boost their projections of real GDP growth over the next couple of years," the minutes stated.
At 5:57AM ET (10:57GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.22% at 91.69.
3. Oil holds near multi-year highs ahead of inventory data
Oil prices showed mixed trade on Thursday but maintained levels not seen since before a slump in commodity markets in 2014-15 amid ongoing tensions in Iran and as traders were eyeing the release of U.S. crude inventory data due later in the day.
Iran's Revolutionary Guards deployed forces to three provinces to put down the anti-government protests, marking the biggest challenge to the country's clerical leadership since 2009.
So far the unrest has had little impact on Iranian oil production with experts suggesting that, beyond worker strikes, the country’s oil resources are located far from where protests are currently taking place.
Meanwhile, market participants will keep an eye on U.S. crude inventories at 11:00AM ET (16:00GMT) amid expectations for a draw of around 5.1 million barrels. On Wednesday data from the American Petroleum Institute showed that U.S. oil stockpiles fell 5 million barrels.
The reports were released one day later than normal due to the New Year’s holiday.
U.S. crude oil futures rose 0.24% to $61.78at 5:58AM ET (10:58GMT), while Brent oil slipped 0.13% to $67.75.
4. Euro zone economic growth strongest in nearly 7 years
The euro zone economy closed out the year with the strongest growth in nearly seven years, driven by accelerating services and manufacturing activity across all major economies, a survey showed on Thursday.
IHS Markit's composite purchasing managers' index (PMI) rose to 58.1 in December from 57.5 in the prior month. That was its highest level since February 2011 and well above the 50 mark that separates expansion from contraction.
Elsewhere in PMI data, Japanese manufacturers marked the final month of 2017 with the greatest improvement in operating conditions since February 2014, while Chinese composite business activity saw its fastest rate of growth in a year thanks to the quickest expansion in the services sector since August 2014.
5. Asian shares hit 10-year high as Dow faces off with 25,000
Global stocks continued their bullish trend on Thursday with Asian share jumping to a 10-year high as bulls continue to pile into equities. Japan's Nikkei soared 3.3% on its first trading day of the year, hitting its highest level in a quarter of a century.
European stocks also continued to rally Thursday on the upbeat growth outlook and generally positive sentiment for equities. The benchmark Euro Stoxx 50 gained around 0.9% by 5:59AM ET (10:59GMT).
U.S. futures pointed to a continuation of the rally after the S&P 500 cleared 2,700 for the first time ever, while the Dow could face off with the 25,000 point mark during Thursday’s session. At 5:59AM ET (10:59GMT),the blue-chip Dow futures rose 67 points, or 0.27%, S&P 500 futures advanced 2 points, or 0.08%, while the Nasdaq 100 futures gained 10 points, or 0.16%.