Investing.com - Here are the top five things you need to know in financial markets on Friday, March 3:
1. Yellen may confirm March rate hike
All eyes will be on Federal Reserve (Fed) chair Janet Yellen on Friday as she speaks on the economy at the Executives’ Club of Chicago at 1:00PM ET (18:00GMT).
Several Fed speakers, with particular attention paid to the shift in the normally dovish Fed Governor Lael Brainard, have already succeeded in boosting the market pricing of a March hike to 75% from around 18% last week, according to Investing.com’s Fed Rate Monitor Tool.
Market players will be looking for Yellen to confirm the possibility of policy tightening before the Fed enters the blackout period ahead of the March 14-15 meeting.
Also on Friday, Chicago Fed president Charles Evans, Richmond Fed chief Jeffrey Lacker, Fed governor Jerome Powell and Fed vice chair Stanley Fischer are all set to deliver remarks.
2. Bitcoin passes gold while reaching new all-time highs
The bitcoin hit a new record high on Friday, passing the value of an ounce of gold, on the back of speculation that the Securities & Exchange Commission (SEC) could approve a U.S.-issued ETF on the digital currency, perhaps increasing its attractiveness for institutional investors.
The SEC will decide by March 11 whether to approve a proposal for a bitcoin-focused exchange-traded fund (ETF) filed almost four years ago by Cameron and Tyler Winklevoss. If approved, it would be the first bitcoin ETF issued and regulated by a U.S. entity.
Hopes are that the SEC regulation would not only backstop confidence in the digital currency, encouraging institutional investors to place money in the asset, but that those institutions would provide a bit of stability to trades.
According to the CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, the crypto-currency reached an intraday high of $1,290.13.
On the New York-based itBit exchange, bitcoin gained 1.61% to $1,278.07 by 5:54AM ET (10:54GMT).
In comparison, gold for April delivery on the Comex division of the New York Mercantile Exchange dropped $4.25, or 0.34%, to trade at $1,228.65.
3. ISM non-manufacturing PMI on tap as European service activity shows strength
The major economic report from the U.S. on Friday will be the Institute of Supply Management’s (ISM) non-manufacturing purchasing managers’ index (PMI) for February at 10:00AM ET (15:00GMT).
Analysts expected American service sector activity to remain unchanged at 56.5, a level that, while having cooled off from the end of 2016, still reflects strong growth for the beginning of 2017.
Over in Europe, a strong recovery in the German services sector, coupled with a six-year high in France and over a one-year high in Italy helped pushed euro zone business activity to grow at its fastest rate since April 2011.
The U.K. however showed signs of weakness as activity hit a five-month low.
4. Dollar slips from 7-week high ahead of Yellen
The dollar slipped on Friday from its highest level in seven weeks against a basket of currencies, though the greenback remained underpinned by March rate hike bets while markets waited for the “final word” from Yellen.
Yellen and her number two, Stanley Fischer, were widely expected to endorse hawkish remarks made by fellow Fed colleagues throughout the week.
The dollar index was last off by 0.14% at 102.02 by 5:56AM ET (10:56GMT) but remained on track for gains for the week.
5. Oil recovers from 3-day decline
Oil markets recovered on Friday after three straight sessions of declines as the dollar edged away from a multi-week high, although prices were being held in check by unchanged Russian output for February, a sign of its weak compliance on a global deal to cut supplies.
Russia's February oil output was unchanged from January at 11.11 million barrels per day (bpd), energy ministry data showed, with its cuts from October 2016 levels remaining at 100,000 bpd or a third of what was pledged by Moscow under its agreement with the Organization of the Petroleum Exporting Countries (OPEC).
Investors also looked ahead to the most recent data from Baker Hughes on U.S. drilling activity as concerns that increased output stateside could cancel out the impact of the output cut accord.
Last Friday, the oilfield services provider revealed that the number of active U.S. rigs drilling for oil rose by five in the previous week, the sixth weekly increase in a row. That brought the total count to 602, the most since October 2015.
U.S. crude oil futures rose 0.32% to $52.78 at 5:58AM ET (10:58GMT), while Brent oil traded up 0.44% to $55.32.