Investing.com - Here are the top five things you need to know in financial markets on Tuesday, December 27:
1. Dollar inches higher in light holiday season trade
The U.S. dollar edged slightly higher against the other major currencies after the long Christmas weekend on Tuesday, holding near the strongest level since December 2002 as the market entered the last trading stretch of the year.
Trading activity was likely to stay subdued as many investors already closed books before the end of the year, reducing liquidity in the market.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 103.03 by 5:50AM ET (10:50GMT), not far from last week's 14-year peak of 103.62.
Against the yen, the dollar was up 0.2% at 117.33, compared to a 10-1/2 month high of 118.65 set last week.
Meanwhile, the euro was little changed against the greenback at 1.0450, hovering above last week's 13-year low of 1.0352.
Elsewhere, the British pound was steady at around 1.2270 against the dollar, within sight of a seven-week low of 1.2229 touched late last week.
2. Global stocks mixed after holiday weekend
U.S. stock markets pointed to a flat to slightly lower open on Tuesday morning, with the Dow holding within sight of the psychologically important milestone of 20,000.
Meanwhile, European stocks struggled for direction in quiet mid-morning trade, amid thin volumes during the holiday period in the region.
In Asia, markets ended mixed, with the Shanghai Composite in China closing 0.25% lower, while the Nikkei in Japan ended little changed.
3. U.S. consumer confidence data in focus
The U.S. Conference Board is to publish data on December consumer confidence at 10:00AM ET (15:00GMT) Tuesday, with market players expecting the index to rise to 108.5 from 107.1 a month earlier.
If confirmed it would be the strongest reading since July 2007, fueling optimism over the health of the economy and supporting expectations of higher interest rates in the months ahead.
Tuesday will also see the release of the S&P Case-Shiller HPI, due out at 9:00AM ET (14:00GMT). In addition, the Richmond Fed survey is to be released at 10:00AM ET, followed by the Dallas Fed survey at 10:30AM ET.
4. ECB tells Monte dei Paschi it needs to raise €8.8 billion
Investors contemplated the future of Banca Monte dei Paschi di Siena (MI:BMPS) after the European Central Bank told the embattled Italian lender that it needs to plug an €8.8 billion ($9.2 billion) capital shortfall, higher than a previous €5 billion gap estimated by the bank.
Meanwhile, ECB policymaker Jens Weidmann said Monday that plans for a government bailout will need to be approved by the European Union to ensure state-aid rules aren’t breached.
Last Friday the Italian government approved a €20 billion aid package to bail out Monte dei Paschi after the bank failed to pull off a last-ditch private €5 billion recapitalization.
5. Oil firms with output cut deal in sight
Oil prices firmed amid thinning pre-New Year holiday trade on Tuesday, less than a week before major global oil producers scale back production in line with the deal they struck last month.
OPEC members agreed to reduce output by a combined 1.2 million barrels per day starting from January 1, their first such deal since 2008.
The pact was followed by an agreement from 11 non-OPEC producers, led by Russia, to cut their supplies by 558,000 barrels a day, bringing the total to almost 1.8 million barrels per day.
However, some traders remain skeptical that the planned cuts will be as substantial as the market currently expects.
U.S. crude was up 15 cents, or 0.28%, to $53.17, while Brent dipped 2 cents, or 0.05%, to $55.88 a barrel.