5 Things To Know Today In Financial Markets
Here are the top five things you need to know in financial markets on Tuesday, May 9:
1. Wall Street’s volatility index at 23-year low
The widely-watched CBOE Volatility Index, which measures implied volatility of U.S. stock options and is often seen as an investor fear gauge, closed down almost 8% at 9.77 on Monday, its lowest since December 1993.
The record low for the VIX is December 22 ,1993, when it reached 9.31. By comparison, the VIX’s historical average is 20.
Easing concern over political risk in Europe, combined with solid corporate earnings and optimism over the global economy have skewed investor sentiment toward riskier assets.
2. Global stocks higher as traders look for next catalyst
Global stock markets were mostly higher on Tuesday, as investors searched for the next catalyst following the French election.
Asian equities closed mixed in subdued trade, with Japan’s Nikkei ending down about 0.3%, while the Shanghai Composite in China ended little changed after five straight sessions of losses.
In Europe, stocks across the continent edged higher in mid-morning trade, with Germany’s DAX and London’s FTSE 100 both up 0.6%, while France’s CAC 40 rose 0.4%.
On Wall Street, the blue-chip Dow futures inched up 24 points, or around 0.1%, the S&P 500 futures tacked on 2 points, while the tech-heavy Nasdaq 100 futures added 3 points.
3. Dollar powers ahead on June rate hike bets
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was stronger for a third consecutive session, gaining 0.2% to 99.23 in New York morning trade.
Against the yen, the dollar traded at 113.74, its highest level it almost two months (USD/JPY).
The euro, which traded at a six-month high of 1.1036 on Monday, was softer against the dollar at around 1.0900 (EUR/USD).
Meanwhile, 10-year Treasury yields rose 1.8 basis points to 2.392%.
Markets are pricing in around an 82% chance of a hike at the Fed’s June meeting, according to Investing.com’s Fed Rate Monitor Tool.
4. Oil extends rebound as OPEC hints at supply cuts beyond 2017
Oil prices were higher on Tuesday, extending a rebound off last week’s four-month lows on the likelihood key producers could extend output cuts beyond an agreed-on June deadline.
U.S. crude was at $46.44 a barrel, up 5 cents, or around 0.1%, while Brent gained 2 cents to $49.36.
OPEC and non-member oil producers are considering extending a global supply cut for nine months or more to help clear a supply glut, OPEC and industry sources said on Monday.
5. Bitcoin tops $1,700 for first time
Bitcoin cleared the $1,700-level for the first time on Tuesday, amid optimism that the Securities and Exchange Commission will reverse its decision to reject a bitcoin-focused exchange-traded fund later this month.
A decision is due by May 15. An approved ETF would make bitcoin investing simple for small traders and institutions.
The cryptocurrency hit a daily peak of $1,736.87. It was last at $1,732.50 a coin, up around 6%. It has gained for 16 straight days, rising more than 34% over that time.