Investing.com - Here are the top five things you need to know in financial markets on Wednesday, February 28:
1. Global Stocks Slide Amid Fed Jitters
Global equities slumped, after hawkish comments from Federal Reserve Chair Jerome Powell revived fears that interest rates will increase faster than expected this year.
Asian shares ended broadly lower, with markets in Japan and mainland China faring the worst, closing down 1.4% and 1% respectively. A miss in Japanese and Chinese manufacturing data further weighed on sentiment.
In Europe, nearly all the continent's major bourses traded in negative territory in mid-morning trade. The Stoxx Europe 600 index, the region's broadest measure of share prices, fell around 0.4%, with most sectors in the red.
Meanwhile, on Wall Street, U.S. stock futures inched higher, an indication that equities may be ready to bounce back from the Tuesday's drop. Dow futures were up nearly 60 points, or around 0.2%, while S&P 500 futures added 6 points, or about 0.2%, and Nasdaq 100 futures tacked on 12 points, or roughly 0.2%.
Earnings ahead of bell are expected from home improvement retailer Lowe’s (NYSE:LOW) and TJ Maxx parent company TJX Companies (NYSE:TJX). After the bell, Victoria’s Secret-parent L Brands (NYSE:LB), Monster Beverage (NASDAQ:MNST), and Salesforce.com Inc (NYSE:CRM) report.
U.S. stocks suffered their biggest daily drops since a selloff three weeks ago, with the Dow Jones industrial average falling nearly 1.2%, or about 300 points.
2. Dollar Jumps To Five-Week High
The U.S. dollar rose to its strongest level in more than five weeks, boosted by bets that the Fed could increase interest rates as many as four times this year.
The Fed's last round of economic projections in December pointed to three rate hikes in 2018.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, was last at 90.40, after hitting an overnight high of 90.50, the best level since Jan. 22.
Meanwhile, the U.S. 10-year Treasury yield stood at 2.901%, staying within sight of a four-year high of 2.957% reached last week.
Wednesday's economic calendar features the second estimate of GDP growth for the fourth quarter, due at 8:30AM ET (1330GMT), expected to show a small downward revision from 2.6% to 2.5%. A survey on manufacturing activity in the Chicago-area will be released at 9:45AM ET (1445GMT), followed by pending home sales figures at 10AM ET (1500GMT).
3. EU To Publish First Draft Of Brexit Deal
The European Commission will unveil the first full draft of the historic Brexit withdrawal treaty later today, with just three weeks left to agree on the Brexit transition phase.
The 100-page document is likely to infuriate euroskeptics in British Prime Minister Theresa May’s Conservative government, piling further pressure on her at a critical time.
The document is expected to say Northern Ireland might have to continue following EU single market rules if it wants to avoid a "hard" border with the Irish Republic, according to reports. Downing Street's already dismissed the possibility of a hard border.
The pound inched down against the dollar at 1.3885.
4. Soft Euro Zone Inflation Backs Up Slow ECB Tapering
Inflation in the euro zone slowed in February, remaining below the European Central Bank's target, lending support to the bank's decision to withdraw monetary stimulus only slowly.
Consumer prices rose 1.2% this month, the European Union’s statistics office said. That was in line with expectations and compared to a final reading of a 1.3% advance in the prior month. In a further blow to the ECB’s drive to boost inflation, the core rate remained unchanged at 1%.
The euro was lower at 1.2220 against the dollar, after touching its worst level since Jan. 18 at 1.2199 earlier.
Losses were amplified as analysts said investors were cautious on the single currency due to political risks in Italy, which holds a general election on March 4.
5. EIA Weekly Oil Supply Report Ahead
The U.S. Energy Information Administration will release its weekly report on oil supplies at 10:30AM ET (1530GMT), amid analyst expectations for a gain of 2.4 million barrels.
The American Petroleum Institute said late Tuesday that U.S. oil inventories rose by 933,000 barrels in the week to Feb. 23. There are often sharp divergences between the API estimates and the official figures from EIA.
Oil prices were on the backfoot, with U.S. West Texas Intermediate crude futures slipping 30 cents, or 0.4% to $62.71 per barrel, while London-traded Brent crude futures were at $66.23 per barrel, down 40 cents, or 0.6%.