Investing.com - Here are the top five things you need to know in financial markets on Tuesday, August 23:
1. Global stocks creep higher; Yellen speech eyed
U.S. stock index futures pointed to a marginally higher open on Tuesday morning, as investors looked ahead to a fresh batch of corporate earnings reports and U.S. economic data, while awaiting a key speech by Federal Reserve Chair Janet Yellen.
Meanwhile, European and U.K. stocks were slightly higher in mid-morning trade, boosted by data which showed that the euro zone economy had yet to feel a negative impact from the Brexit vote.
Earlier, Asian shares ended mixed, with traders hesitant to make big bets ahead of a speech from Federal Reserve Chair Janet Yellen at Jackson Hole on Friday.
2. Dollar drops amid Fed rate hike uncertainty
The dollar was lower against most of the major currencies on Tuesday, including the yen, euro and pound, as markets looked ahead to a speech by Federal Reserve Chair Janet Yellen later this week that could shed light on the timing of a U.S interest rate hike.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 94.40 early Tuesday, pulling back from the prior session's high of 94.94 but still keeping distance from last week's eight-week low of 94.05.
According to Investing.com's Fed Rate Monitor Tool, investors are pricing in an 18% chance of a rate hike by September, up from 12% at the start of last week. December odds were at around 50%.
3. Euro zone post-Brexit private sector growth hits 7-month high
Economic activity in the euro zone rose to a seven-month high in August, providing more evidence that the region's economy remained resilient in wake of the U.K.’s decision to leave the European Union earlier in the summer.
The preliminary reading of the euro zone composite purchasing managers’ index, which measures the combined output of both the manufacturing and service sectors, ticked up to 53.3 from 53.2 in July.
The PMI pointed to GDP expanding 0.3% this quarter.
4. Oil extends its downward swing as crude slips to $47
Oil prices were down for the second day in a row on Tuesday, retreating further from the highest levels in nearly two months amid growing concerns that the upcoming meeting among major oil producers may not yield any action to reduce the global glut.
U.S. crude was down 42 cents, or 0.89%, to $46.99 a barrel during morning hours in New York, while Brent dropped 40 cents, or 0.81%, to $48.76.
5. Volkswagen settles dispute with suppliers
After more than 20 hours of negotiations that went on through the night, Volkswagen (DE:VOWG_p) and two of its parts suppliers resolved a contract dispute that had hit output at more than half of the carmaker's German plants and threatened to undermine its recovery from a diesel emissions scandal.
The suppliers, CarTrim, which makes seats, and ES Automobilguss, which produces cast iron parts needed to make gearboxes, confirmed an agreement had been reached but gave no further details.