Investing.com - Here are the top five things you need to know in financial markets on Monday, January 22:
1. U.S. Government Shutdown Enters Third Day
The U.S. government shutdown entered a third day after Democrats and Republicans failed to reach a deal Sunday night to fund government operations amid a bitter dispute over immigration and border security.
Senate Majority Leader Mitch McConnell said that an overnight vote on a measure to fund government operations through Feb. 8 was canceled and would instead be held at 12:00PM ET (1700 GMT) on Monday, but uncertainty remained over whether it had enough votes to pass.
Funding for federal agencies officially ran out at midnight on Friday. This is the first U.S. government shutdown since 2013. That year, the government was shut down for 16 days.
The shutdown could sideline significant numbers of federal employees and government contractors and potentially dampen quarterly growth figures.
2. Global Stocks Mostly Unfazed by U.S. Shutdown Standoff
Global stock markets were muted, as investors took a relatively calm view of the partial shutdown of the U.S. federal government.
Most major indexes in Asia closed mixed, as equities in South Korea and Australia retreated, but other major bourses in the region edged higher.
In Europe, the majority of the continent's bourses traded with little clear direction, as markets focused on a flurry of M&A and the release of fresh corporate earnings.
On Wall Street, U.S. stock futures pointed to a slightly lower open, as investors kept an eye on political developments in the U.S. regarding the government shutdown.
On the earnings front, Monday sees results from Halliburton (NYSE:HAL) and Wynn Resorts (NASDAQ:WYNN) ahead of the opening bell, with tech giant Netflix (NASDAQ:NFLX) reporting after the close.
3. Dollar Wallows Near 3-Year Lows; 10-Year Bond Hits 2.67%
The dollar was pinned near a three-year low as a U.S. government shutdown encouraged investors to add to bearish bets against the greenback.
The dollar index, which gauges the U.S. currency against a basket of six major rivals, was down around 0.3% at 90.24, not far from the three-year trough of 89.96 set last Thursday.
Meanwhile, U.S. Treasuries price fell, pushing up the benchmark 10-year yield to as high as 2.672%, its highest level in 3-1/2 years.
4. Euro Gains as German Coalition Talks Move Forward
The euro enjoyed a strong start to the week, boosted by political developments in Germany, where progress has been made toward forming the next coalition government.
Chancellor Angela Merkel on Sunday welcomed news that the opposing Social Democratic Party voted to begin formal coalition talks with her Christian Democrats after months of stalemate, easing a political deadlock in the euro area’s largest economy.
Merkel, SPD leader Martin Schulz and the leader of Merkel's CSU Bavarian allies, Horst Seehofer, will meet on Monday and the full talks may start as early as Tuesday.
The euro edged up around 0.3% against the dollar to 1.2253, within sight of a three-year peak of 1.2323 that it scaled last Wednesday.
5. Oil Finds Support After Bullish Saudi Comments on Supply Deal
Crude prices inched higher, finding support after Saudi Arabian energy minister Khalid al-Falih said OPEC and non-OPEC oil producers have a consensus that they should continue cooperating on production after the end of 2018, when their current agreement on production cuts expires.
Falih added that this might mean a new form of deal rather than continuing the same supply cuts that have boosted prices in recent months.
He spoke at a news conference after a meeting of the joint ministerial committee which oversees implementation of the cuts.
Brent futures rose 10 cents to $68.71 per barrel, while U.S. West Texas Intermediate crude futures gained 11 cents to $63.42 per barrel.