Here are the top five things you need to know in financial markets on Friday, April 8:
1. Investors to keep an eye on Fed speakers
With a relatively uneventful economic calendar stateside, market participants will continue to keep watch over remarks from Federal Reserve (Fed) officials on Friday.
New York Fed president William Dudley was scheduled to speak on the economy at 12:30GMT, or 8:30AM ET, Philadelphia Fed chief Patrick Harker will make a speech at 13:00GMT, or 9:00AM ET, and the head of the Dallas Fed, Robert Kaplan, will give opening remarks at a Texas-Mexico conference at 13:30GMT, or 9:30AM ET.
After the market close on Thursday, Fed chair Janet Yellen defended the decision to raise rates last December and maintained that “a gradual path of rate increases will be appropriate”.
Kansas City Fed president Esther George, who voted for a rate hike at the last Fed meeting, later warned of the dire consequences of waiting too long to tighten monetary policy.
2. Pound pares gains after worrisome data
The pound trimmed gains on Friday after a sharp decline in U.K. manufacturing production raised worries that the recovery in the British economy was faltering. The annual drop in manufacturing output was the biggest since July 2013, while industrial production unexpectedly declined on a monthly basis.
Separately, the U.K. trade deficit came in wider than expected as imports from the European Union (EU) hit a record high of £20 billion.
GBP/USD was trading above 1.41 before the data release but quickly pared gains, losing that level after the publication. The pair rose 0.16% to 1.4078 at 9:59AM GMT, or 5:59AM ET. Meanwhile, EUR/GBP dropped 0.20% to 0.8079, while GBP/JPY rose 0.66% to 153.10.
3. Yen strength causes “tension”
Japan’s finance minister Taro Aso said on Friday that he was watching moves in currency markets with “tension” after the yen hit a fresh 18-month high against the dollar on Thursday.He affirmed that the Japanese government was prepared to counter any “one-sided” moves in the currency market.
The comments helped weaken the Japanese currency with USD/JPY rising 0.49% to 108.75, at 10:01AM GMT, or 6:01AM ET. EUR/JPY gained 0.50% to 123.70 and GBP/JPY traded up 0.67% to 153.13.
4. German exports provide hope for euro zone economy
German exports rose by 1.3% in February, beating expectations for a 0.5% increase. That was the fastest pace since September and provided some relief for worries about first quarter GDP growth in the motor of the euro area economy.
In a separate report released on Friday, Moody’s Investors Service said that it expected German growth to slightly accelerate in 2016 thanks to relatively strong domestic demand.
The news may give some hope to policy makers as European Central Bank (ECB) president Mario Draghi warned on Thursday of the economic challenges facing the single currency area in 2016.
5. Oil rebounds sharply, global stocks broadly higher
Crude futures rebounded sharply on Friday after Thursday’s sell-off and while investors looked ahead to U.S. rig count data from Baker Hughes.
U.S. crude oil futures rose 3.54% to $38.58, at 10:03AM GMT, or 6:03AM ET, while Brent oil traded up 3.25% to $40.71.
In stocks, the Nikkei 225 closed with gains of 0.46%, though Dow Jones Shanghai fell 0.76% and S&P/ASX All Australian 200 lost 0.53%.
At 10:06AM GMT, or 6:06AM ET, European stocks markets moved higher with the European benchmark Euro Stoxx 50 trading up 1.22%, the DAX gaining 0.90%, the CAC 40 advancing 0.82% and London's FTSE 100 adding 0.65%.
U.S. futures also tallied gains. Specifically, at 10:03AM GMT, or 6:03AM ET, the blue-chip Dow futures rose 0.53%, S&P 500 futures added 0.63% and the Nasdaq 100 futures gained 0.68%.