Deadly terrorist bombings in Brussels gave investors a scare on Tuesday. But markets as a whole have become increasingly resilient in the face of terror attacks.
1. Time for a rebound
1. Rebound time
All major European stock markets are stepping up in early trading.
Shares in hotel and airline companies plunged on Tuesday but are bouncing back Wednesday. Shares in InterContinental Hotels (IHG) are rising by about 1%, and airlines Ryanair (RYAAY) and EasyJet (ESYJY) are also higher.
U.S. stock futures are holding near Tuesday's closing levels as the U.S. dollar strengthens against major currencies. Most Asian markets ended the day in the red, but the losses weren't dramatic.
The commodity market isn't faring so well. Oil, gold, aluminum and copper prices are slipping a tad. Gold and oil prices have staged dramatic rallies over the past few weeks.
2. Hawkish Fed talk drives U.S. dollar to 1-week high
2. Hawkish Fed talk drives U.S. dollar to 1-week high
The U.S. dollar rose to a one-week high against a basket of major currencies on Wednesday, boosted by hawkish comments by Federal Reserve officials.
Philadelphia Fed President Patrick Harker said late on Tuesday that the central bank should consider another interest rate hike as early as next month and added that he would prefer at least three hikes before year-end.
Meanwhile, Chicago Fed President Charles Evans said he expects two more rate increases this year, if the economy remains on track.
The market will be paying attention to a speech by St. Louis Fed President James Bullard later in the day to further judge the balance of opinion among policymakers on the prospect of further rate hikes.
3. GBP under pressure amid Brexit fears
3. GBP under pressure amid Brexit fears
The pound continued to fall against the dollar and the euro on Wednesday, as the attacks in Brussels were seen as increasing the chances of a British exit from the European Union in a June 23 referendum.
The Bank of England’s Financial Policy Committee, which is charged with safeguarding financial stability, was to hold its final meeting before the referendum later Wednesday.
4. Economics
4. Economics
Traders will also be watching for some key pieces of economic data. The U.S. Census Bureau is reporting February new home sales at 10 a.m. ET. And the U.S. government releases its weekly crude oil inventory data at 10:30 a.m.
