Investing.com - Here are the top five things you need to know in financial markets on Tuesday, July 12:
1. Global stocks rally again on Japan stimulus hopes
Global stocks rallied again on Tuesday, as prospects for more monetary stimulus from the Bank of Japan combined with easing political tensions in Britain boosted appetite for riskier assets.
Asian shares rose to a 2-1/2-month peak, a day after Wall Street hit a record high. Japan's Nikkei jumped 2.5% as investors bet the country's government may inject $100 billion in fiscal spending to boost the economy.
Meanwhile, European stocks opened higher, with Germany's DAX climbing more than 1%, as political uncertainty in the U.K. eased with the imminent appointment of Home Secretary Theresa May as U.K. prime minister.
Elsewhere, U.S. stock index futures pointed to more gains at the open on Tuesday morning. The S&P 500 settled at a record high on Monday, while the Dow and Nasdaq both posted their highest close of the year so far thanks to a combination of upbeat U.S. data and expectations of more stimulus from global policymakers.
2. Yen tumbles again as markets anticipate more BoJ stimulus
The yen sank across the board for the second straight day on Tuesday, after Prime Minister Shinzo Abe flagged a fresh fiscal stimulus package on Monday after his ruling coalition won a landslide victory in the Upper House.
The coalition’s firmer grip means policymakers can more easily approve a bigger fiscal stimulus package to spur the economy. A stimulus package of at least 10 trillion yen ($97.9 billion) is expected.
The dollar jumped to 103.78, the most since June 24. It last stood at 103.74, up 0.9% on the day (USD/JPY). Against the euro, the yen dropped 1.4% to 115.23 (EUR/JPY).
3. Pound nears $1.32 as Brexit concerns ease
The pound rose towards the $1.32-level against the dollar on Tuesday, as investors welcomed news that British Home Secretary Theresa May will succeed David Cameron as prime minister of the U.K., diminishing fears over a prolonged period of political uncertainty.
Outgoing Prime Minister David Cameron said on Monday that he will make way for May to succeed him by Wednesday evening. The news came after rival Andrea Leadsom announced she was pulling out of the race Monday.
Sterling rose 1.45% to $1.3180, pulling away from a 31-year post-Brexit low of $1.2798 struck last week (GBP/USD). The pound also rose 1% against the euro to hit 0.8426 (EUR/GBP).
4. Oil bounces off 2-month lows ahead of OPEC monthly report
Oil prices were higher on Tuesday, bouncing off the prior session's two-month low as investors looked ahead to a monthly report from the Organization of Petroleum Exporting Counties due later in the session to gauge global supply and demand levels.
The report could show OPEC production rose by 300,000 barrels a day last month to a nearly eight-year high of 32.7 million barrels a day, due to steadily increasing output from Libya, Nigeria, Saudi Arabia and Iran.
Brent jumped 91 cents, or 1.99%, to $47.16 a barrel, while U.S. crude was up 74 cents, or 1.65%, to $45.50.
5. Fed speakers take center stage
Market players awaited comments from a barrage of Federal Reserve officials later in the session to judge the balance of opinion among policymakers on the prospect of further rate hikes.
St. Louis Fed President James Bullard is set to speak at 13:35GMT, or 9:35AM ET, on Tuesday to the Gateway Chapter of the National Association for Business Economics.
Fed Governor Daniel Tarullo is due to give remarks at 13:15GMT, or 9:15AM ET, on shadow banking, while Minneapolis Fed President Neel Kashkari is expected to give remarks at 21:30GMT, or 5:30PM ET, on the economy and the role of the Federal Reserve System.