Investing.com - Here are the top five things you need to know in financial markets on Tuesday, March 27:
1. U.S.-China trade tensions ease
Trade tensions appeared to be easing further on Tuesday after reports that China and the U.S. are in talks to find a mutually agreeable approach to narrow the trade deficit gap.
U.S. Treasury Secretary Steven Mnuchin said he is “cautiously hopeful” that China would reach a deal to avoid tariffs on $50 billion of U.S. exports.
Mnuchin called China’s Liu He to congratulate Liu on his appointment this month as vice premier in charge of economic policy. According to a Bloomberg report citing sources familiar with the matter, the two discussed plans for finding a mutually agreeable way to reduce the trade gap.
Several media reports confirmed that Chinese and U.S. officials were busy negotiating to avert an all-out trade war. White House officials are reportedly asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors.
2. Stocks recover as U.S.-China trade war concerns ease
As tensions over the possibility of a trade war between the U.S. and China eased, Wall Street ended sharply higher a day earlier and bullish sentiment was set to continue on Tuesday.
The recovery started Monday came after Wall Street logged its biggest weekly drop since January 2016. U.S. futures pointed to a continuation of the gains on Tuesday. At 5:46AM ET (9:46GMT), the blue-chip Dow futures gained 166 points, or 0.69%, S&P 500 futures rose 19 points, or 0.71%, while the Nasdaq 100 futures traded up 69 points, or 1.01%.
Asian shares latched on to the rekindled hopes with Japan’s Nikkei 225 springing up 2.4%, its best day in three months. China’s Shanghai Composite gained more than 1%.
European stocks followed suit with gains of more than 1% across the board.
3. Dollar bounces back ahead of confidence, Fedspeak
The dollar bounced off a five-week low against major rivals on Tuesday as trade tensions eased and investors looked ahead to appointments on the economic calendar to get a feeling for the strength of the underlying U.S. economy.
Economists forecast the Conference Board’s consumer confidence gauge to show a reading of 131.2 for March from 130.8 in the previous month.
The Richmond Fed manufacturing index for March is expected to fall to 23 from a reading of 28 in February.
S&P/Case-Shiller will release their home price index which is projected to show a 0.7% increase in January.
A speech by Atlanta Federal Reserve Bank President Raphael Bostic at 11:00AM EST (15:00GMT) is also expected to draw investor focus after the Fed policymaker said Friday he would support further rate hikes this year if the economy continued to strengthen.
At 5:47AM ET (9:47GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last up 0.32% at 88.92.
4. Oil continues rally ahead of inventory data
Oil prices continued the bullish trend in March despite rising shale production with the U.S. benchmark and the London barrel on track for monthly gains of 6% and 5%, respectively.
After a brief dip a day earlier on the back of Baker Hughes’ data that showed that the number of oil drilling rigs in the U.S. rose by four to 804, its highest level since March 2015, crude moved higher on Tuesday as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products to gauge the strength of demand in the world’s largest energy consumer.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT) Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock gain of around 0.4 million barrels.
U.S. crude oil futures rose 0.40% to $65.81 at 5:48AM ET (9:48MT), while Brent oil gained 0.42% to $69.86.
5. Cryptocurrencies plunge after LitePay shutdown
Cryptocurrency prices plunged on Tuesday as Litecoin’s payment processor LitePay abruptly terminated its operation just one month after its launch in February.
The Litecoin Foundation, which oversees the development of Litecoin and invests in LitePay, announced on its website on Tuesday that the Litecoin payment processor had terminated its operations.
LitePay was due to launch its merchant service on February 26, but in an email to its clients on March 5, it said it was still "checking all perspective merchants" and was holding off on card registrations “due to the negative feedbacks and drastic actions card issuers have towards cryptocurrency companies.”
The announcement added to bearish sentiment already present across the asset class. On Monday, Twitter mirrored recent moves by both Facebook (NASDAQ:FB) and Google (NASDAQ:GOOGL), confirming it would ban advertising for cryptocurrencies to ensure the “safety of the Twitter community”.
At 5:49AM ET (9:49GMT), Litecoin slumped 8.7% to $144.69.
Meanwhile, Bitcoin, the world's biggest virtual currency by market cap, was down around 7% to $7,908.90.
Ethereum, Bitcoin’s closed rival by market cap, fell about 12% to $464.77.
The third largest cryptocurrency Ripple lost roughly 9.5% to trade at $0.57128.