Top 5 Things To Know In The Market On Monday

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by: Investing.com

Here are the top five things you need to know in financial markets on Monday, June 19:

1. Britain, EU launch Brexit talks

Britain's Brexit minister David Davis and the European Union's chief negotiator Michel Barnier are due to start negotiations over Britain's departure from the bloc in Brussels on Monday, kicking off a two-year divorce process due to end by March 2019.

The discussions come less than two weeks after Theresa May and her Conservative Party lost their overall majority in parliament. Fighting for her political survival, May has been trying to strike a deal with a the Democratic Unionist Party, a small Northern Irish Protestant party.

The British pound was up 0.2% against the dollar at 1.2806 in New York morning trade (GBP/USD).

It hardly budged on news that a van ploughed into worshippers leaving a London mosque on Monday, killing at least one person and injuring several, in what was being treated as an apparent terror attack.

2. Dudley kicks off busy week of Fed speakers

New York Fed Chief William Dudley, considered a close ally of Fed Chair Janet Yellen, will kick off a busy week of Fed speakers on Monday, giving a talk to business and community leaders in Plattsburgh, New York at 8:00AM ET (1200GMT).

Later in the global day, Chicago Fed President Charles Evans will speak about current economic conditions and monetary policy at an event in New York City.

They are the first of a slew of Fed appearances scheduled for this week including Vice Chairman Stanley Fischer and Governor Jerome Powell.

Last week, the Fed raised interest rates as widely expected and maintained plans to go ahead with another rate hike by year-end. The central bank also provided greater detail about how it plans to reduce its massive $4.5 trillion balance sheet.

Despite the Fed's relatively hawkish message, market players remained doubtful over the Fed's ability to raise rates as much as it would like before the end of the year due to a recent run of disappointing U.S. economic data.

Futures traders are pricing in less than a 15% chance of a hike at the Fed's September meeting, according to Investing.com's Fed Rate Monitor Tool. Odds of a December increase was seen at about 35%.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was little changed at 96.87.

3. Macron wins parliamentary majority

French President Emmanuel Macron's government on Monday promised to renew politics in France as final official results showed he had won the commanding parliamentary majority he wanted to push through his far-reaching pro-growth reforms.

Macron's centrist Republic on the Move (LREM) party and its center-right Modem ally won 350 seats out of 577 in the lower house, the results showed after a vote that saw a record low turnout for a parliamentary poll in the postwar Fifth Republic.

The euro treaded water against the dollar at 1.1195, while French stocks jumped 1%, on track for its biggest rise since May 5.

4. Global stocks push higher

Global stock markets were mostly higher on Monday, as investors shifted their attention to political events across Europe, while awaiting comments from a top Federal Reserve official.

On Wall Street, the tech-heavy Nasdaq 100 futures pointed to a gain of 36 points, or roughly 0.6%, at the open, the blue-chip Dow futures rose 66 points, or around 0.3%, while the S&P 500 futures ticked up 7 points, or about 0.3%.

In Europe, stocks rose across the board, with Germany's DAX and Britain's FTSE firmly in the green in mid-morning trade, led by bank shares and retailers.

Earlier, Asian shares ended in positive territory, with Japan's Nikkei moving back above the 20,000-level.

5. Oil bounces higher after last week's losses

Oil prices bounced back from the prior week's losses on Monday, but gains were limited as the market weighed ongoing efforts by major producers to cut output and reduce a global glut against a relentless increase in U.S. drilling activity.

U.S. crude was at $45.13 a barrel, up 16 cents, or around 0.4%, while Brent tacked on 20 cents to $47.57.

WTI lost $1.13, or about 2.4%, last week, while Brent fell 78 cents, or roughly 1.6%. Both have now posted losses four weeks in a row, which marks the longest weekly losing streak since August 2015 for WTI.

U.S. drillers last week added rigs for the 22nd week in a row, according to data from energy services company Baker Hughes, implying that further gains in domestic production are ahead.

The increase in U.S. drilling activity and shale production has mostly offset efforts by OPEC and other producers to cut output in a move to prop up the market.

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