Investing.com - Here are the top five things you need to know in financial markets on Wednesday, March 1:
1. Hints of March rate hike boost dollar to 7-week high
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up around 0.4% at 101.72 in New York morning trade. It rose to 101.79 earlier, its strongest level since January 11.
Treasury yields shot up, with the U.S. 10-Year bond up around 6 basis points at 2.420%, after reaching a daily peak of 2.426%, the highest since February 22.
Expectations for a March U.S. interest rate hike mounted after influential New York Fed President William Dudley said that the case for tightening monetary policy "has become a lot more compelling".
Fed fund futures priced in about a 70% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool. Odds of a May increase was seen at 74%, while June odds were at around 85%.
More clues on interest rate hikes ahead of the central bank's March 14-15 meeting are expected to come Wednesday, when Fed Governor Lael Brainard speaks at 6:00PM ET (23:00GMT).
On the data front, the U.S. is to release personal income, consumer spending and core price index data for January at 8:30AM ET (13:30GMT). At 10:00AM ET (15:00GMT), the ISM will publish its manufacturing survey for February. There are also monthly vehicle sales issued by auto manufacturers throughout the morning.
2. Trump offers few policy details in speech to Congress
Markets digested a speech by U.S. President Donald Trump to Congress overnight, which offered little details on his plans for infrastructure spending and tax reforms.
The president said he was open to reforming the U.S. immigration system and pledged massive tax relief for the middle class, but did not expand further.
Some analysts said Trump's speech, while lacking details on economic policies, did seem positive after a turbulent month in office.
3. Global stock markets in rally mode with Fed, Trump in focus
U.S. stock market futures pointed to a higher open on Wednesday morning, with the Dow futures rising to a fresh all-time high above the 20,900-mark in pre-market trade.
In Europe, stocks rose sharply in mid-morning trade, with Germany's DAX up 1.3%.
Earlier, in Asia, markets ended mostly higher, with the Shanghai Composite in China closing up around 0.2%, while Japan's Nikkei surged about 1.5%, buoyed by a weaker yen.
4. Oil traders await U.S. supply data
The U.S. Energy Information Administration will release its official weekly oil supplies report at 10:30AM ET (15:30GMT) Wednesday, amid analyst expectations for a rise of around 3.1 million barrels.
Gasoline inventories are expected to fall by 1.8 million barrels while stocks of distillates, which include heating oil and diesel, are forecast to drop by 611,000 barrels.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 2.5 million barrels in the week ended February 24. The API report also showed a gain of 1.84 million barrels in gasoline stocks, while distillate stocks dropped a sharp 3.73 million barrels.
U.S. crude was up 23 cents, or around 0.4%, to $54.24, while Brent added 31 cents to $56.82 a barrel, as OPEC production cuts continued to offer support.
5. Snap to price long-awaited IPO
Snap Inc, owner of popular messaging app Snapchat, will price its initial public offering after the U.S. stock market closes on Wednesday in the most eagerly awaited technology IPO since Chinese e-commerce giant Alibaba (NYSE:BABA) went public in 2014.
Snap is looking to price 200 million shares on Wednesday night at a range of $14 to $16 dollars a share.
The company is targeting a valuation of between $19.5 billion and $22.3 billion from listing on the New York Stock Exchange on Thursday, the richest valuation in a U.S. tech IPO since Facebook (NASDAQ:FB) in 2012.