Investing.com - Here are the top five things you need to know in financial markets on Monday, November 27:
1. Global stocks attempt to shake off Chinese share slump
Global stocks sought to shake off the bearish sentiment in Chinese stocks on Monday as the Shanghai Composite chalked up its biggest three-day decline since June 2016, despite a minor recovery last Friday.
European shares erased early morning losses to turn around on Monday as financials gained ground amid fresh dealmaking activity. The benchmark Euro Stoxx 50 gained 0.34% by 6:08AM ET (11:08GMT), while Germany’s DAX rose 0.28%, as investors kept a close eye on efforts to form a working government. Traders remained cautious despite the fact that leaders of German Chancellor Angela Merkel's conservative party agreed on Sunday to pursue a "grand coalition" with the Social Democrats (SPD) to break the political deadlock.
U.S. futures pointed to a slightly higher open on Monday as many traders returned from a long holiday weekend. Wall Street was closed last Thursday for Thanksgiving and open only half a session on Friday. At 6:09AM ET (11:09GMT), the blue-chip Dow futures rose by 32 points, or 0.14%, S&P 500 futures gained 3 points, or 0.12%, while the Nasdaq 100 futures advanced 10 points, or 0.16%.
2. Bitcoin busts through $9,000, setting sights on $10,000
The price of the digital currency Bitcoin continued to rally on Monday after rising above the $9,000 level for the first time in its nine-year history on Sunday, amid growing fears over an asset bubble.
Bitcoin has risen more than 900% in volatile trade this year, with three separate corrections of more than 25% all giving way to subsequent rallies. At current prices bitcoin has a total market capitalization of around $160 billion.
The move from $8,000 to $9,000 took just nine days as recent announcements from derivatives marketplaces Cboe and CME that they would launch Bitcoin futures was taken as evidence that cryptocurrencies were obtaining wider acceptance have added to speculation that institutional investors will begin to invest in the asset, driving speculation that Bitcoin could hit $10,000 by the end of year.
On the U.S.-based Bitfinex exchange, Bitcoin was at $9,556.9, up $240.9 or 2.59%, by 6:10AM ET (11:10GMT) after rising as high as $9,771.0 earlier.
3. Fed in focus in key week for U.S. monetary policy
The changing of the guard at the Federal Reserve will be a big focus for investors this week, as they look for fresh clues on the likely trajectory of monetary policy.
Fed governor Jerome Powell, selected by President Donald Trump as the next Fed chair, appears before the Senate Banking Committee at 9:45AM ET (14:45GMT) Tuesday for his confirmation hearing.
The following day, current Fed Chair Janet Yellen testifies on the economy at 10:00AM ET (15:00GMT) on Capitol Hill, before the Joint Economic Committee.
Powell is widely expected to sound close to Yellen on monetary policy, but perhaps looser when it comes to banking regulation.
On Monday, Minneapolis Fed president Neel Kashkari will participate in a Q&A at 5:30PM ET (22:30GMT) while New York Fed chief William Dudley will deliver a speech on the U.S. economy at 7:00PM ET (00:00GMT Tuesday).
4. Dollar remains under pressure ahead of tax reform
The dollar remained under pressure on Monday, trading at six-week lows against other major currencies, as investors looked ahead to further signals from the Fed and progress on tax reform this week, while also keeping an eye U.S. housing sector data due later in the day. At 6:11AM ET (11:11GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was off 0.09% at 92.64.
The fact that the Fed minutes revealed last week that “many participants” showed concern over the inflation outlook, mirroring recent remarks by outgoing Fed chair Janet Yellen that it was “very uncertain”, sparked speculation that the future path of tightening may not be as aggressive as originally thought and dampened demand for the greenback.
Traders were also waiting for U.S. President Donald Trump to address Senate Republicans at their weekly luncheon Tuesday on taxes ahead of a potential vote on tax reform.
At 10:00AM ET (15:00GMT) Monday, the U.S. Census Bureau will release new home sales data for October.
5. WTI oil starts week on backfoot as OPEC meeting looms
Investors took profit in the U.S. crude benchmark on Monday, after a weekly gain of around 4%, after data showing increased U.S. shale production and as energy markets looked ahead to this week's Organization of Petroleum Exporting Countries' (OPEC) highly-anticipated meeting to see whether major producers plan to extend their current production-cut agreement.
At 6:12AM ET (11:12GMT) Friday, U.S. crude oil futures fell 0.85% to $58.66, while Brent oil traded up 0.16% to $63.65.
The output curb which is currently set to expire in March 2018 is widely expected to be extended for another nine months.
Russian energy minister Alexander Novak declared Monday that all parties were in favor of extending the pact.
On Friday, oil services provider Baker Hughes said that the number of U.S. rigs drilling for oil rose by eight rigs to 747.