Top 5 Things to Know in the Market on Tuesday
1. Dollar market slides to 6-month low amid Trump worries
The U.S. dollar index market, which measures the greenback’s strength against a trade-weighted basket of six major currencies, weakened for a fifth straight day, falling around 0.4% to 98.44 in New York morning trade.
It slid to an overnight low of 98.37, a level not seen since November 10, amid reports that President Donald Trump disclosed highly classified information to Russia’s foreign minister about a planned Islamic State operation in a meeting last week.
The news added to concerns that Trump will be unable to successfully push through his economic stimulus program in the face of mounting controversies.
Markets are pricing in around a 67% chance of a hike at the Fed’s June meeting, according to Investing.com’s Fed Rate Monitor Tool, down from more than 80% in previous week.
There are a few economic reports Tuesday, including U.S. data on housing starts and building permits at 8:30AM ET (12:30GMT), followed by industrial production figures at 9:15AM ET (13:15GMT).
2. Oil prices continue their advance
Oil futures were up on Tuesday, with prices headed closer to daily highs reached in the prior session, as news that Saudi Arabia and Russia agreed to extend oil output cuts for a further nine months until March 2018 continued to boost sentiment.
U.S. crude was at $49.16 a barrel, up 31 cents, or around 0.6%. The U.S. benchmark ended Monday’s session with gains of $1.01, or 2.1%, after hitting its highest since April 28 at $49.66.
Brent gained 30 cents to $52.12. The global benchmark touched its strongest level since April 21 at $52.63 in the prior session.
Investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products. Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (20:30GMT) later on Tuesday.
3. U.K. inflation climbs to 4-year high
British inflation rose to its highest level since September 2013 last month, according to official data on Tuesday that underlined a growing squeeze on households ahead of the June 8 national election.
Excluding oil prices and other volatile components such as food, core consumer price inflation rose to 2.4%, the strongest rate since March 2013.
The pound pulled back from the day’s highs against the dollar, with GBP/USD at 1.2885, down about 0.1%. It climbed to 1.2957 earlier. Meanwhile, the FTSE 100 rose to a fresh all-time peak, topping the 7,500-mark for the first time.
4. Euro zone Q1 economic growth confirmed at 0.5%
The euro zone’s economy grew in line with preliminary estimates in the first three months of the year, underlining optimism over the health of the region’s economy, data showed on Tuesday.
Eurostat said gross domestic product expanded by 0.5% in the first quarter, unchanged from an initial estimate and meeting expectations. Year-over-year, the economy expanded 1.7% in the three months ended March 31.
A separate report showed that German economic sentiment improved in May, hitting the highest level since July 2015.
The euro climbed to a six-month peak of 1.1050 against the dollar. It was last at 1.1045, up around 0.6% (EUR/USD). European stock markets were mostly lower, but remained within sight of recent multi-year highs.
5. More U.S. retail earnings on deck
Earnings from the likes of retailers such as Home Depot (NYSE:HD), TJX (NYSE:TJX) and Staples (NASDAQ:SPLS) are on the radar Tuesday, especially in light of last week’s dismal results from department store retailers like Macy’s (NYSE:M) and Nordstrom (NYSE:JWN). Urban Outfitters (NASDAQ:URBN) is also due to report but after the market close.
U.S. stock futures pointed to a flat open Tuesday morning, with the blue-chip Dow futuresinching up 12 points, or less than 0.1%, while the S&P 500 futures dipped 1 point and the tech-heavy Nasdaq 100 futures added 4 points.