Top 5 Things To Know In The Market On Monday

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Top 5 Things To Know In The Market On Monday
Credit: © Reuters.

Investing.com - Here are the top five things you need to know in financial markets on Monday, May 14:

1. U.S.-China Trade Back In The Spotlight

Trade was back into focus after U.S. President Donald Trump said in a Sunday tweet that he was working with Chinese President Xi Jinping to give struggling Chinese telecom giant ZTE (HK: 0763 ) "a way to get back into business, fast."

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The U.S. government had imposed a ban on U.S. companies from supplying ZTE with technology after the Chinese firm was found to have illegally shipped equipment to Iran.

With the second round of U.S.-China trade negotiations expected to kick off this week, the move by Trump was seen by some analysts as a concession from the U.S. side.

Chinese Vice Premier Liu He, Jingping's top economic adviser, will attend the talks in Washington, which begin on Tuesday.

High-level discussions in Beijing earlier this month appeared to make little progress but there have been signs recently of some easing in tensions.

Trump struck an optimistic tone ahead of the meeting, saying that "it will all work out."

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2. Oil Prices Back Off Recent Highs

Oil prices edged lower, moving away from more than three-year highs touched recently, as a rise in U.S. drilling for new production dampened sentiment.

New York-traded WTI crude futures dipped 20 cents to $70.52 a barrel, while Brent crude futures , the benchmark for oil prices outside the U.S., declined 22 cents to $76.90 a barrel.

U.S. drillers added 10 oil rigs last week, bringing the total count to 844 , the highest number since March 2015. That was the sixth consecutive weekly increase in the rig count, underscoring worries about rising U.S. output.

Losses were held in check as investors continued to assess the implications of President Donald Trump walking away from the Iran nuclear deal last week.

3. Dow Futures Up Nearly 100 Points

Dow futures rose, indicating stocks may be ready to pick up where they left off last week, as hopes of a thaw in U.S.-China trade tensions boosted sentiment.

The blue-chip Dow futures rose 92 points, or about 0.4%, the S&P 500 futures tacked on 6 points, or nearly 0.2%, while the tech-heavy Nasdaq 100 futures indicated a gain of 21 points, or roughly 0.3%.

Another win for the Dow Jones Industrial Average would mark its eighth-straight advance, the longest positive streak since one that ended Sept. 20, 2017.

While just 10 S&P 500 companies are due to report financial results this week, retailers are just getting started in what will be the last big wave of the first-quarter earnings season.

Home Depot (NYSE: HD ) unofficially kicks things off when it reports on Tuesday; results from Macy's (NYSE: M ) are on the agenda for Wednesday; while Walmart (NYSE: WMT ), the world’s largest retailer, is due to report results on Thursday.

Elsewhere, in Europe, the continent's major bourses were slightly lower, as investors focused on Italian politics, trade relations between the U.S. and China, and a dip in oil prices.

Earlier, in Asia, most markets in the region closed higher, with Malaysian stocks recovering after dropping at the open as markets reopened following an election.

4. Dollar Falls For 4th Session In A Row

The dollar edged lower against a basket of the other major currencies, putting it on track for its fourth down session in a row.

The U.S. dollar index , which measures the greenback’s strength against a basket of six major currencies, was down around 0.2% at 92.21.

The index hit four-and-a-half month highs of 93.26 last Wednesday before retreating to end the week almost unchanged, as tame U.S. inflation data tempered expectations for a faster pace of rate hikes by the Federal Reserve.

No top-tier U.S. economic data is on the calendar for Monday, but the rest of the week will be busy enough, with retail sales due Tuesday.

Elsewhere, the euro pushed higher even as two Italian political parties reached a deal that puts the country on course to be led by an antiestablishment and euroskeptic governing coalition.

The single currency changed hands at 1.1985 ( EUR/USD ), having recovered from last week’s lows of 1.1821, a level not seen since late December.

5. Fed Speakers Eyed For Rate Hikes Hints

A busy week for Federal Reserve speakers kicked off with Cleveland Fed President Loretta Mester, who has a vote on monetary policy this year, saying the central bank may need to raise interest rates above 3% if the U.S. economy grew faster than expected.

She made the comments at the Global Interdependence Center’s central banking series in Paris, France earlier on Monday.

Next up, St. Louis Fed President James Bullard is slated to speak about cryptocurrencies at the CoinDesk Consensus 2018 conference in New York at 9:40AMET (1340GMT).

Bullard on Friday spelled out the case against any further interest rate increases, saying rates may already have reached a "neutral" level that is no longer stimulating the economy.

Investors have fully priced in a rate rise at the Fed's next policy meeting on June 12-13. However, Wall Street is divided over how many more time the central bank will raise interest rates after that.

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