Oil prices hovered near three-month lows while a key gauge of world stock indexes advanced yesterday as investors braced for a busy week for global markets, including a potential US interest rate hike by the Federal Reserve.
The dollar steadied against a basket of currencies after touching a two-week low. Friday’s strong US employment report solidified a view among Wall Street’s top banks that the Federal Reserve will boost interest rates when its policy makers meet this week.
“Right now, the markets appear to be in a wait-and-see phase ahead of the Fed decision,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.
MSCI’s all-country world stock index rose 0.2 per cent.
US stocks were little changed ahead of the expected Fed rate hike later this week.
The Dow Jones Industrial Average fell 34.76 points, or 0.17 per cent, to 20,868.22, the S&P 500 lost 1.7 points, or 0.07 per cent, to 2,370.9 and the Nasdaq Composite added 9.02 points, or 0.15 per cent, to 5,870.74.
Corporate deal-making continued as chips giant Intel said it would acquire driverless technology firm Mobileye for $15.3 billion. Mobileye shares jumped 30 per cent.
In Europe, Amec Foster Wheeler rallied 13 per cent after oil services company Wood Group agreed to buy the company for $2.7 billion.
The pan-European STOXX 600 index gained 0.4 per cent, helped by increases in mining shares.
Aside from the Fed meeting, which starts today, the world’s most powerful finance ministers and central bankers convene in the German town of Baden Baden starting on Friday, their first meeting since Donald Trump won the US election.
Oil prices hovered around three-month lows, as rising US inventories and drilling activity offset optimism over Opec’s efforts to restrict crude output.
US crude fell 0.1 per cent to $48.43 a barrel, and touched its lowest point since November 30. Brent crude edged up 0.1 per cent to $51.42 a barrel.
The dollar edged up 0.02 per cent against a basket of key world currencies, recovering after Friday’s bout of profit-taking following the robust US jobs report.
Sterling, which has been one of the worst performers against the American dollar over the last two weeks, rose 0.5 per cent after the devolved Scottish government yesterday demanded the right to hold another referendum on independence.
US Treasury yields edged higher in anticipation of a Fed rate hike tomorrow, nervousness that the central bank could indicate a more aggressive pace of future rate hikes, and new corporate bond supply.
Prices for benchmark 10-year Treasuries slipped 2/32 to yield 2.589 per cent, from a yield of 2.582 per cent late on Friday.
Spot gold edged up 0.02 per cent, but remained near 1.5-month lows.