Investing.com - Here are the top five things you need to know in financial markets on Monday, December 19:
1. Dollar rally stalls as investors take profits
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.1% at 102.82 by 6:00AM ET (11:00GMT), as some investors took profits ahead of the year-end holidays.
It climbed as high as 103.55 late last week, a level not seen since December 2002, after the Federal Reserve hiked interest rates for the first time in a year and projected three more increases in 2017, up from the two projected in September.
Against the yen, the greenback was down slightly at 117.45 in early trade, taking a breather after climbing to an 11-month high of 118.65 last week.
Meanwhile, the euro was little changed at 1.0445, holding above a nearly 14-year low of 1.0365 notched last week.
2. Yellen speech on tap
Federal Reserve Chair Janet Yellen is set to speak in Baltimore at 1:30PM ET (18:30GMT) on the state of the job market.
The speech comes just days after the U.S. central bank raised its benchmark interest rate and signaled it would raise rates faster than previously anticipated next year.
Investors are hoping she will provide more insight on the Fed's direction heading into 2017.
3. Global stock markets subdued as holiday season approaches
U.S. stock markets pointed to modest gains at the open on Monday morning, with the Dow inching closer to the 20,000 mark, as investors kick off the last full week of trading of the year.
Meanwhile, European and U.K. stocks were mostly lower in mid-morning trade, dropping from a 2016 high as the region’s financial sector came under pressure from developments in Italy.
Shares in Italy's Banca Monte dei Paschi di Siena (MI:BMPS) sank more than 8% as it made a last-ditch attempt to raise €5 billion by the end of the year and avoid a state bailout.
In Asia, the Shanghai Composite in China closed 0.15% lower, while the Nikkei in Japan closed 0.05% lower.
4. Oil firms below 17-month highs in anticipation of tighter market
Oil prices edged higher on Monday, amid indications that major crude producers are adhering to their promise to pull back on output.
Brent tacked on 31 cents, or 0.56%, to $55.52 a barrel, not far from a 17-month high of $57.89 touched earlier in the week.
U.S. crude was up 29 cents, or 0.55%, to $53.24, within sight of a one-and-a-half-year peak of $54.51 logged on December 12.
5. German business sentiment nears 3-year high
German business confidence in December improved to the highest level since February 2014, suggesting company owners were not affected by Donald Trump’s victory in the U.S., the Ifo Institute said Monday.
The Ifo's Business Climate Index rose to 111.0 this month from a reading of 110.4 in November, a sign that Europe's largest economy will enter 2017 on a solid footing.