Tuesday May 31th

31-05-2016

US futures mildly higher ahead of data deluge; Fed, OPEC eyed

U.S. stock-index futures pointed to a narrowly higher open on Wall Street on Tuesday, as traders wait to scour a data pile for hints as to whether the U.S. Federal Reserve will hike interest rates this month. Personal income rose 0.4 percent, while personal spending increased 1 percent in April. The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rose 0.2 percent last month after edging up 0.1 percent increase in March. In the 12 months through April the core PCE rose 1.6 percent after a similar increase in March, Reuters reported. The Chicago purchasing managers' index (PMI) for May and consumer confidence for May are due later in the morning. These reports come ahead of the all-important non-farm payrolls report on Friday, at the end of a shortened trading week on Wall Street because of the U.S. Memorial Day holiday on Monday. "We expect a gain of only 120,000 in non-farm payrolls in May (Friday), partly owing to the strike by Verizon workers. Even putting the temporary distortions aside, employment growth could be weak enough to leave the Fed's decision next month on a knife edge," Paul Ashworth, chief North American economist at Capital Economics, said in a report on Friday. "Otherwise, April's personal spending data (Tuesday) should confirm that consumption growth got off to a much better start in (the second quarter)" he added. Companies reporting quarterly earnings on Tuesday include Workday and TiVo. Medtronic posted results that beat expectations on both the top and bottom line. Asian markets were mostly higher on Tuesday, with Chinese mainland markets up more than 2 percent and Japan shares rising after better-than-expected economic data. Chinese mainland markets soared on Tuesday, with the Shanghai Composite closed up 3.32 percent, or 93.7 points at 2,916.49 and the Shenzhen composite closed 4.091 percent higher, or 73.585 points at 1,872.359. In Hong Kong, the Hang Seng index was 1.2 percent higher at 3:22 p.m. HK/SIN time. The Nikkei 225 closed up 0.98 percent, or 166.96 points at 17,234.98, while in South Korea, the Kospi ended the session up 0.83 percent, or 16.27 points at 1,983.4. Brent crude prices fell on Tuesday on rising output from the Middle East and ahead of an OPEC meeting later this week, while U.S. crude edged higher as the summer driving season began. Brent crude oil futures were down 26 cents at $49.50 a barrel by 8:32 a.m. ET (1232 GMT), while U.S. West Texas Intermediate (WTI) crude oil futures traded 23 cents higher at $49.56 a barrel. Iraq will supply 5 million barrels of extra crude to its international oil company partners in June, industry sources familiar with the issue said, joining other Middle East producers by lifting market share. Gold rose on Tuesday, rebounding from a three-and-a-half-month low hit in the previous session, but remained on track for its biggest monthly decline since November on broad strength in the dollar and growing expectations of an imminent U.S. rate hike. Spot gold was up 0.5 percent at $1,211.16 an ounce, having fallen by as much as 1 percent on Monday to $1,199.60. That was its lowest since Feb. 17, pressured by strength in the dollar and a rise in global share prices, increasing investors' risk appetite and leaving gold set for a 6.3 percent decline in May.