Washington, US (BBN) – Here are the top five things you need to know in financial markets on Tuesday, March 21, reports Investing.com.
1. DOLLAR DROPS FOR 5TH DAY IN A ROW
The dollar extended losses to a fifth session on Tuesday, on track for its longest losing streak since early November as traders continued to pare back bullish bets following the Federal Reserve’s dovish guidance on the future pace of rate hikes.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down around 0.4 per cent at 99.76 by 5:58AM ET (09:58GMT), the weakest level since February 6.
The greenback has been on the retreat since the Fed raised interest rates on Wednesday last week, but stuck to its outlook for two more hikes this year, instead of three expected by the market.
Market players awaited comments from a number of Federal Reserve policymakers for more clues on the timing of the next US rate hike.
Tuesday sees New York Fed President William Dudley, Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester make public appearances.
Fed Chair Janet Yellen speaks on Thursday.
2. OIL PRICES REBOUND ON OPEC DEAL TALK
Oil prices pushed higher on Tuesday, bouncing back from the prior session’s losses amid speculation that OPEC could extend its production-cut deal beyond June if global crude inventories failed to drop to a targeted level.
US crude was up 40 cents, or about 0.8 per cent, to $49.31 a barrel, while Brent rose 41 cents to $52.03.
OPEC members increasingly favor extending the output curb beyond June to balance the market, sources within the group said, although they added that this would require non-OPEC members such as Russia to also step up their efforts.
OPEC and non-OPEC producers agreed in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the first six months of 2017, but so far the move has had little impact on inventory levels.
3. GLOBAL STOCKS MIXED
US stock market futures pointed to a higher open on Tuesday morning, tracking gains in oil prices as traders await further details on President Donald Trump’s promises of tax reform and infrastructure spending.
In Europe, stocks hunted for direction in subdued mid-morning trade, with Germany’s DAX up 0.1 per cent, while London’s FTSE100 dipped 0.2 per cent.
Earlier, in Asia, markets ended mixed, with the Shanghai Composite in China closing up around 0.4 per cent, while Japan’s Nikkei declined about 0.4 per cent.
4. EURO JUMPS TO 6-WEEK HIGH AFTER MACRON WINS DEBATE
The euro jumped to six-week highs against the dollar on Tuesday, after opinion polls showed that Emmanuel Macron consolidated his status as frontrunner in France’s presidential election in a televised debate against his main rival, far-right anti-EU leader Marine Le Pen.
Macron was seen as the most convincing of the top five election contenders in the debate, according to a pair of opinion polls released shortly after the debate ended.
The first round of the French Presidential election is scheduled on April 23, with the run-off between the top two contenders on May 7.
EUR/USD reached a daily peak of 1.0804, the strongest since February 2, before pulling back to 1.0794, up 0.5 per cent on the day.
5. UK INFLATION HITS HIGHEST SINCE 2013
British consumer prices rose more than expected last month, hitting its highest level since September 2013 and breaking through the Bank of England’s target for the first time in more than three years.
Consumer prices rose 2.3 per cent compared with a year earlier, the Office for National Statistics said Tuesday, above expectations for a 2.1 per cent annual rise and compared to the 1.8 per cent increase seen in January.
The pound jumped to 1.2471 against the dollar following the data, a level not seen since February 28.
It was last at 1.2460, up around 0.8 per cent (GBP/USD).
The BOE has said it will tolerate inflation overshooting its 2 per cent goal as it provides support to the economy, though that stance could be tested if it starts to push up domestic price pressures.
BBN/MS/SK