Top 5 Things to Know In the Market on Wednesday

Here are the top five things you need to know in financial markets on Wednesday, August 10:

1. Oil slumps 1% ahead of U.S. stockpile data

Oil prices fell more than 1% on Wednesday on bearish bets for U.S. weekly crude inventory data out later in the session and concerns of oversupply continued to weigh on black gold.

Saudi Arabia was reported to have pumped a record 10.67 million barrels a day in July in order to meet summer demand as investors looked ahead to a monthly report from the Organization of Petroleum Exporting Counties due later in the session to gauge global supply and demand levels.

Rising stockpiles stateside continued to keep nerves on edge with the U.S. Energy Information Administration set to release its weekly report on oil supplies at 14:30GMT, or 10:30AM ET, Wednesday amid expectations for a drop of 1.025 million barrels.

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by a surprising 2.1 million barrels in the week ended August 5. It also showed a decline of 4.0 million barrels in gasoline stocks.

U.S. crude oil futures slumped 1.24% to $42.24 at 9:56AM GMT, or 5:56AM ET, while Brent oil traded down 0.96% to $44.55.

2. Dollar down as markets reassess Fed rate hike expectations

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, moved lower on Wednesday, as traders reevaluated the odds that the Federal Reserve (Fed) could return to policy tightening this year.

An unexpected third consecutive decline in nonfarm labor productivity on Tuesday dampened buying sentiment in the dollar and decreased odds for rate hike.

While waiting for trade to resume on Wednesday, Fed fund futures assigned only a 40% probability that rates will move higher by December, according to the CME Group’s FedWatch tool.

3. Precious metals jump on dollar weakness

Palladium led gains in precious metals by the most since 2010 on Wednesday with gold trading higher for a second straight day on the aforementioned dollar weakness

Palladium had climbed as much as 8% on Wednesday to its highest level in more than a year, while gold rose nearly 1%.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

4. BoE plans to make up bond-buying shortfall, sending gilt yields to fresh record lows

As part of the quantitative easing measures implemented last week, the Bank of England (BoE) admitted late Tuesday that owners of British 10-year debt, known as the gilt, declined its offer to buy £1.17 ($2.22 billion) of the U.K. sovereign bonds, leaving it with a £52 million ($68 million) shortfall.

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The BoE announced that it would make up that shortfall over the next six months, prompting investors to once again pile into the gilt pushing the yield to a fresh record low of 0.531% on Wednesday.

5. Global stocks mostly lower near 2016 highs

Global stocks were mostly lower on Wednesday as productivity data from the U.S. dampened the outlook for the global economy.

Chinese stocks, Japan’s Nikkei and the Australian benchmark all moved lower.

European stocks also showed cautious trade on Wednesday.

Meanwhile, U.S. futures bucked the general trend pointing to meager gains. At 9:57AM GMT, or 5:57AM ET, the blue-chip Dow futures inched up 5 points, or 0.02%, S&P 500 futures edged forward 1 point, or 0.06%, while the Nasdaq 100 futures traded up 2 points, or 0.04%.