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Top 5 Things to Know in the Market on Monday

EconomyFeb 26, 2018 05:23AM ET
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© Reuters. Top 5 things to know today in financial markets - Here are the top five things you need to know in financial markets on Monday, February 26:

1. Global Stocks Start The Week With Gains

Global equities continued to build on recent gains, as investors braced for an event-packed week headlined by the first House testimony by the new head of the Federal Reserve Jerome Powell.

Asian markets ended broadly higher, with Japan's Nikkei 225 leading the region with an increase of 1.2%, while Chinese blue chips added 1.1%.

In Europe, nearly all the continent's major bourses traded in positive territory in mid-morning trade. The Stoxx Europe 600 index, the region's broadest measure of share prices, rose 0.7% to hit its highest level in more than three weeks.

Meanwhile, on Wall Street, U.S. stock futures pushed higher, an indication that equities may be ready to pick up where they left off late last week.

Dow futures were up nearly 160 points, or around 0.6%, while S&P 500 futures rose 10 points, or about 0.4%. Nasdaq 100 futures gained 11 points, or roughly 0.2%.

U.S. stocks rallied more than 1% on Friday, pushing the major indexes higher for the week.

2. Dollar Loses Momentum, U.S. Bond Yields Slide Lower

The U.S. dollar slipped, losing some of its recent momentum, while U.S. bond yields sagged, as investors prepared for Jerome Powell’s first appearance as Fed Chair in which he may give clues on U.S. monetary policy.

The dollar index, which gauges the U.S. currency against a basket of six major rivals, dipped almost 0.4% to 89.48. It gained nearly 0.9% last week, having pulled away from a three-year low of 88.15 set on Feb. 16.

Meanwhile, the U.S. 10-year Treasury yield eased a tad to 2.864%, continuing a pullback from the four-year high of 2.957% reached last Wednesday.

Powell will speak before congressional committees on Tuesday and Thursday. Investors will pay close attention to comments on his views on the recent uptick in inflation and how that can affect the current rate-hiking path.

Before that, traders will be watching for comments from two Fed officials due to speak Monday. St. Louis Fed President James Bullard is due to give a speech on the economy and monetary policy at the National Association of Business Economics in Washington, D.C., at 8AM ET (1300GMT). Fed Vice Chairman Randall Quarles will speak at the same venue at 3:15PM (2015GMT).

On the data front, the highlight of Monday's rather light economic calendar will be new home sales figures at 10:00AM ET (1500 GMT).

3. Euro Finds Support Ahead of Draghi Speech

European Central Bank President Mario Draghi will testify on monetary policy and the inflation outlook before the European Parliament Economic and Monetary Affairs Committee, in Brussels at 1400GMT (9:00AM ET).

How he views inflation prospects and any clues on how fast the central bank will begin exiting its massive quantitative easing program will be important.

The euro was up 0.3% against the dollar to 1.2345. Gains were limited as analysts said investors were cautious about taking big positions this week due to political risks in Italy, which holds a general election on March 4.

4. Saudi Remarks Lift Oil To Nearly Three-Week High

Oil prices hit their highest level in nearly three weeks, supported by comments from Saudi Arabia that it would continue to curb exports in line with the OPEC-led effort to cut global supplies.

U.S. West Texas Intermediate crude reached $63.90, the highest since Feb. 7, before pulling back to $63.58. London Brent crude was at $67.02, after touching an overnight peak of $67.30, also the strongest since Feb. 7.

Both benchmarks scored weekly gains last week amid growing optimism that rebalancing in crude markets are well underway thanks to OPEC-led production cuts. However, fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies prevented prices from rising much farther.

5. Bitcoin Falls Towards $9K As Bearish Momentum Continues

The prices of major cryptocurrencies continued lower for the third day in a row, with Bitcoin, Ethereum and Ripple all falling towards their lowest levels in a week, as overall market sentiment waned.

The price of Bitcoin, the world's biggest virtual currency by market cap, lost around 1% to $9,460, after hitting an overnight low of $9,280, a level not seen since Feb. 14.

The news was no better for other major digital currencies, with Ethereum, the world’s second largest cryptocurrency by market cap, falling around 2% to $824.20.

The third largest cryptocurrency Ripple slumped around 2% to trade at $0.88542.

Top 5 Things to Know in the Market on Monday

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