Investing.com -- These are the top 5 things you need to know in financial markets on Tuesday, May 21.
1. Ceasefire in trade war, but Huawei kidding?
The U.S. has dialled down the tension with China a notch, but the Chinese aren’t impressed.
After the Commerce Department signalled it would give specific exemptions to U.S. companies that sell to telecoms giant Huawei for three months, Huawei founder Ren Zhengfei said it wouldn’t stop further conflict between the U.S. and China further down the line.
Elsewhere, the Organization for Economic Cooperation and Development warned again that trade disputes threatened to act as a long-term brake on global growth. It argued that business investment this year and next would grow only 1.75%, roughly half of last year’s level.
2. Wall Street Set to Open Higher; Retail Earnings Eyed
U.S. stock markets are set to open higher, following a relief rally in Asian and European stocks overnight.
3. Oil Pauses for Breath
Crude oil prices were taking a breather after Monday’s leg up on the back of an escalating war of words between President Donald Trump and Iran.
“Today’s situation is not suitable for talks and our choice is only resistance,” Iran’s state-owned news agency IRNA quoted President Hassan Rouhani as saying late on Monday.
At 5:30 PM ET, the American Petroleum Institute will release its weekly review of U.S. oil stocks. Analysts estimate the government’s weekly data will show a draw of 2.53 million barrels from crude inventories last week.
4. Dollar Marches Higher
The dollar has ground higher, approaching the two-year high that it hit in April, amid fears that the trade war may evolve into a currency war. The dollar index, which measures the greenback against a basket of currencies, hit 97.968 overnight before retracing to 97.917.
Overnight, the dollar was stable against the Chinese yuan, but it rose sharply against advanced economy currencies after Australia’s central bank signalled it may cut interest rates at its policy meeting next month.
The euro and sterling, meanwhile, continue to labor under concerns over Brexit and the results of this week’s European parliament elections. The OECD in its report warned the Bank of England against raising interest rates amid the current uncertainty over Brexit. The BoE has signalled that it thinks labor market tightness would justify a rate hike, other things being equal.
5. Existing Home Sales, Fed speeches
A relatively light data calendar is led today by existing home sales data at 10 AM ET. Expectations are for a 2.7% increase after a 4.9% drop in March.
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