Here are the top five things you need to know in financial markets on Friday, February 16:
1. Dollar hovers near 3-year low
The U.S. dollar fell to three-year lows against other major currencies earlier on Friday on the back of rising concerns over U.S. policies, especially the rising deficit.
The greenback has been under presssure amid sustained concerns over the deficit in the U.S., which is projected to climb near $1 trillion in 2019 following the announcement of infrastructure spending and large corporate tax cuts.
At 5:50AM ET (10:50GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.08% at 88.53, pulling off its 3-year low of 88.16 hit in overnight trade.
The dollar was still on track for weekly losses of 2% against major rivals, hovering near its lowest level since December 2014.
Market participants will also keep an eye on data to be released later in the session. At 8:30AM ET (13:30GMT), housing starts, building permits along with import and export prices for January will all be released.
At 10:00AM (15:00GMT), the University of Michigan will publish its preliminary report of consumer sentiment for February.
2. U.S. stocks set to extend solid run for 6th session
World shares were set to post their best week of gains in six years on Friday after two consecutive weeks spent in the red.
After Wall Street closed with its best 5-day run of gains since 2011, U.S. futures pointed to a continuation of the rally on Friday as investors looked ahead to the aforementioned string of economic data and also prepared to watch company earnings.
Elsewhere, European shares were on track for healthy weekly gains on Friday near midday trading, snapping a three-week losing streak as earnings updates continued to impress.
Earlier, Japan’s Nikkei 225 ended Friday with strong gains of 1.2% as its Prime Minister confirmed his nomination of Bank of Japan governor Haruhiko Kuroda for a second term. Chinese stocks were closed to celebrate the Lunar New Year.
3. Kuroda officially nominated for another term as BoJ governor
Prime Minister Shinzo Abe nominated Haruhiko Kuroda to lead the Bank of Japan for another five-year term, with the Cabinet forwarding the nomination to parliament on Friday.
Central bank insider Masayoshi Amamiya and university professor Masazumi Wakatabe were also named to be deputy governors.
The jobs require confirmation by both houses of parliament.
The appointments provide stability for the world’s third-largest economy and mean aggressive monetary stimulus will stay in place for now.
4. Oil on track for weekly gains of 4% ahead of U.S. shale data
Crude oil prices rose on Friday, helped by a weak U.S. dollar and incoming reports this week that OPEC and Russia plan to work out a long-term alliance to help balance global supply.
However fears that rising U.S. output could dampen OPEC’s efforts to rid the market of excess supplies have systematically limited oil prices' gains recently.
The U.S. Energy Information Administration (EIA) reported last Wednesday that U.S. crude production rose to a record high of 10.27 million barrels per day (bpd), furthering its lead over Saudi Arabia, the largest OPEC producer.
With that in mind, market participants will receive further input on the state of U.S. shale production when Baker Hughes releases its most recent weekly rig count datalater on Friday.
5. SEC blocks Chicago Stock Exchange sale to China-based investors
U.S. regulators on Thursday killed the politically sensitive sale of the Chicago Stock Exchange (CHX) to a group led by China-based investors, saying a lack of information on the would-be buyers threatened the ability to properly monitor the exchange after the deal.
The move by the Securities and Exchange Commission (SEC) ends a two-year battle to gain approval for the sale and underscores the more hostile environment facing Chinese buyers under the administration of U.S. President Donald Trump.