By Lewis Krauskopf
| NEW YORK
NEW YORK Oil prices hovered near three-month lows while a key gauge of world stocks advanced on Monday as investors braced for a busy week for global markets, including a potential U.S. interest rate hike by the Federal Reserve.The dollar steadied against a basket of currencies after touching a two-week low.Friday's strong U.S. 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.With a rate hike widely expected, market watchers will be looking for signals about the pace of future increases."I think all eyes will be on what the Fed does and, more importantly, what they say in their comments," said Brant Houston, managing director at CIBC Atlantic Trust Private Wealth Management.MSCI's all-country world stock index rose 0.3 percent.U.S. stocks were little changed ahead of the expected Fed rate hike later this week.
The Dow Jones Industrial Average fell 39.96 points, or 0.19 percent, to 20,863.02, the S&P 500 lost 2.55 points, or 0.11 percent, to 2,370.05 and the Nasdaq Composite added 6.50 points, or 0.11 percent, to 5,868.23.Corporate deal-making continued as chips giant Intel said it would acquire driverless technology firm Mobileye for $15.3 billion. Mobileye shares jumped 29 percent.In Europe, Amec Foster Wheeler rallied 11.6 percent after oil services company Wood Group agreed to buy the company for $2.7 billion.The pan-European STOXX 600 index gained 0.4 percent, helped by increases in mining shares.
Aside from the Fed meeting, which starts on Tuesday, 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 U.S. election.Oil hovered around three-month lows as rising inventories and drilling activity in the United States offset optimism over OPEC's efforts to restrict crude output and reduce a global glut.U.S. crude fell 0.3 percent to $48.34 a barrel, and touched its lowest point since Nov 30. Brent crude slipped 0.1 percent to $51.33 a barrel.
The dollar edged up 0.05 percent against a basket of key world currencies, recovering after Friday's bout of profit-taking following the robust U.S. jobs report."We remain bullish on the dollar, but as Friday's events suggested, a lot of good news is already priced into the dollar at current levels," said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto.Sterling, which has been one of the worst performers against the dollar over the last two weeks, rose 0.5 percent after the devolved Scottish government demanded the right to hold a new referendum on independence.U.S. Treasury yields edged higher in anticipation of Fed rate hike on Wednesday, 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 7/32 to yield 2.606 percent, from a yield of 2.582 percent late on Friday.Spot gold fell 0.1 percent as the prospect of imminent interest rate rises kept them near five-week lows touched last week. (Additional reporting by Gertrude Chavez-Dreyfuss and Sam Forgione in New York, Yashaswini Swamynathan in Bengaluru and Vikram Subhedar in London; Editing by Bernadette Baum and Nick Zieminski)
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Updated Date: Mar 13, 2017 23:45 PM