Investing.com - Here are the top five things you need to know in financial markets on Monday, February 8:
1. China FX reserves drop to 4-year low
China's foreign reserves fell for a third straight month in January to hit the lowest level in four years, as the nation’s central bank sold dollars to defend the yuan and prevent an increase in capital outflows.
The country's foreign reserves plummeted $99.5 billion last month to $3.23 trillion, the lowest level since May 2012, central bank data showed.
The drop, which was slightly more modest than expected, means reserves have shrunk by 19% from the peak in June 2014 as authorities seek to prevent a disorderly slide in the yuan.
Markets in China will be closed for the entire week due to the Lunar New Year holiday.
2. Oil prices reverse gains in volatile trade
Oil prices reversed earlier gains on Monday, amid doubts over the likelihood of a deal between OPEC and on-OPEC producers to cut output happening anytime soon.
U.S. crude was down 62 cents, or 1.99%, at $30.27 a barrel by 10:30GMT, or 5:30AM ET, while Brent slumped 72 cents, or 2.1%, to $33.34.
Saudi Arabia's oil minister Ali al-Naimi discussed cooperation between OPEC members and other oil producers to stabilize the global oil market with his Venezuelan counterpart, Eulogio Del Pino, on Sunday, but it ended with few signs there would be steps taken to boost prices.
3. European stocks tumble to 15-month low
European stock markets sank to their lowest level since October 2014 on Monday, as concerns surrounding global growth and weak oil prices continued to grip markets.
Germany’s DAX 30 plunged 2.8%, France’s CAC 40 lost 2.6%, while London’s FTSE 100 dropped 1.95%.
4. Wall Street points to more losses
U.S. stock markets pointed to heavy losses at the open on Monday, as a brief rally in oil prices faded, prompting investors to dump risky assets such as equities.
The blue-chip Dow futures fell 197 points, or 1.22%, the S&P 500 futures slumped 24 points, or 1.28%, while the Nasdaq 100 futures dropped 68 points, or 1.72%.
The losses come on the heels of the biggest weekly drop in a month for U.S. equities, with a 3.3% drop for the hard-hit Nasdaq Composite on Friday.
Investors will be looking ahead to comments from Federal Reserve Chair Janet Yellen on Wednesday and Thursday, when she testifies to Congress about the economy and monetary policy.
5. Gold rallies to 15-week high
Gold futures jumped to a three-month high on Monday, as retreating oil prices and losses in global equity markets underpinned demand for assets perceived as safer.
Gold for April delivery rallied $16.10, or 1.39%, to trade at $1,173.80 a troy ounce, after rising to $1,175.60, the most since October 28.
The dollar index inched down 0.1% to 96.88, not far from last week’s three-month lows, amid growing uncertainty over the Federal Reserve's ability to raise interest rates as much as it would like this year.