Investing.com - Here are the top five things you need to know in financial markets on Tuesday, June 28:
1. Global equites recover after Brexit sell-off
Global equity markets rose for the first time in three sessions on Tuesday, as investor sentiment began to improve in wake of last week’s shock vote by the U.K. to leave the European Union.
U.S. stock markets pointed to strong gains at the open, with the Dow futures rising 200 points, as investors scooped up beaten down assets after Britain's vote to exit the European Union stunned financial markets.
Elsewhere, European stocks rose sharply, getting a break after two back-to-back selloffs sparked by the U.K.’s Brexit vote.
Earlier, Asian markets closed mostly higher in cautious trade, amid ongoing concerns about the political and economic aftermath of the U.K.’s decision to leave the European Union.
Global stock markets suffered the largest two-day rout ever, as a wave of selling wiped around $3 trillion from markets.
2. Sterling regains some ground after Brexit shock
The British pound pushed higher on Tuesday, bringing a reprieve for the battered currency after recent sharp declines in the wake of the U.K.’s vote to leave the European Union last week.
The pound was up 0.85% against the U.S. dollar at 1.3337, coming off the 31-year low of 1.3122 set on Monday. The two-day selloff in sterling seen on Friday and Monday was the largest in recent history.
Sterling was also higher against the euro, with EUR/GBP down 0.3% at 0.8313, falling back from Monday’s two-year peaks of 0.8378. Against the yen, sterling rose 1.2% to 136.47, coming off Friday's 3-1/2 year low of 133.18 (GPB/JPY).
3. EU leaders meet in Brussels to discuss Brexit
European Union leaders will meet in Brussels later on Tuesday for the start of a two-day European Council summit to discuss Britain’s decision to leave the bloc.
Outgoing U.K. Prime Minister David Cameron is due to speak about the U.K.'s plans for exiting the now 28-member European Union.
Pressure was expected to be applied to the U.K. to trigger Article 50 which sets in motion the process of withdrawing from the EU.
4. U.S. final Q1 GDP data due ahead of the bell
U.S. data due Tuesday includes the third look at first quarter GDP, expected to rise to 1%. It is released at 12:30GMT, or 8:30AM ET. There are also S&P/Case Shiller home prices at 13:00GMT, or 9:00AM ET, followed by consumer confidence data, at 14:00GMT, or 10:00AM ET.
Market players have all but ruled out further rate hikes this year in the aftermath of Britain’s shock vote to leave the European Union.
According to the CME Fed Watch tool, there’s currently a 0% probability of a Fed rate hike in July and a 7% probability of a rate cut. Odds for a September rate cut stood at 18%.
5. Oil regains footing after Brexit sell-off
Oil prices rallied on Tuesday, climbing for the first three in time sessions as investors returned to the market to seek cheap valuations after futures fell to seven-week lows in the prior session.
U.S. crude tacked on 95 cents, or 2.1%, to $47.28 a barrel during morning hours in New York, while Brent was up 88 cents, or 1.8%, at $48.63 a barrel.
Oil got a further boost amid concerns over supply disruption in Norway, where about 755 workers on seven oil and gas fields could go on strike from Saturday if a new wage deal is not agreed before a Friday deadline.
The affected fields account for nearly 18% of Norway's oil output, hitting production from the North Sea's top producer.