Investing.com - Here are the top five things you need to know in financial markets on Wednesday, March 29:
1. U.K. set to trigger Article 50; eyes on pound
British Prime Minister Theresa May is set to trigger Article 50 of the Lisbon Treaty Wednesday, which officially kicks off the process of exiting the European Union, known as Brexit.
May will send a letter to European Council President Donald Tusk formally announcing Britain's withdrawal from the bloc on Wednesday. Tusk will then send draft negotiating guidelines to the 27 other member states within 48 hours.
The correspondence, tentatively scheduled to be delivered at 7:30AM ET (11:30GMT), will start the clock ticking on a two-year countdown to Brexit and allow negotiations to start between London and Brussels in the coming weeks.
Tusk was scheduled to hold a press conference at 7:45AM ET (11:45GMT).
2. Sterling slips ahead of Brexit notification
Meanwhile, sterling slipped in early morning European trade on Brexit anxiety with some experts warning of volatility in the British currency and debating on whether the actual kick off was priced in and the overall impact for the long-term.
The pound remained under pressure near one-week lows, having hit an intraday low at $1.2378, but later managed to recover the $1.24 level, even managing to briefly pass into positive territory.
As the pound began to recover by midmorning in Europe, Accendo Markets analyst Mike van Dulken suggested that “the pound doing its now usual sell the Brexit rumor, buy the Brexit fact”.
GBP/USD was last down 0.11% at 1.2431 by 5:53AM ET (9:53GMT).
3. Dollar continues recovery ahead of Fed speakers and data
The dollar gained ground on Wednesday, pulling further away from the multi-month lows hit earlier in the week, while sterling slid lower as markets braced for Britain to trigger its exit from the European Union.
The greenback continued to move higher on Wednesday on the back of data out the previous session that showed U.S. consumer confidence at its highest level since December 2000.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.13% at 99.66 by 5:55AM ET (9:55GMT). The index had sank to 98.67 on Monday, its lowest since November 11 in the wake of President Donald Trump’s failed healthcare overhaul bill.
Investors were also looking ahead to several appearances from Federal Reserve (Fed) officials throughout the day for any indications on the future path of monetary policy, including remarks from Chicago Fed president Charles Evans, Boston Fed chief Eric Rosengren and San Francisco Fed president John Williams later on Wednesday.
After the market close on Tuesday, Fed governor Jerome Powell indicated that the uncertainty surrounding Trump’s fiscal policy and its eventual impact on the economy was making it difficult to assess the outlook.
On the economic front, attention will focus on February pending home sales, out at 10:00AM ET (14:00GMT).
4. Global stocks mixed with eyes on Brexit
U.S. stock futures pointed to a flat open on Wednesday as investors looked set to take a break after the Dow managed to break its longest losing streak since 2011 a day earlier.
In Europe, stocks traded with mixed signs as traders in London showing caution as the FTSE100 slipped just 0.02%. Elsewhere, equities were mostly higher with the benchmark Euro Stoxx 50 up 0.22%, while Germany's DAX rose 0.46%.
Earlier, Asian stock markets showed a mixed close, with the Shanghai Composite in China closing down 0.21%, while Japan's Nikkei held onto to slight gains of 0.08%.
5. Oil hits 1-week high ahead of U.S. supply data
Oil prices edged higher on Wednesday, hitting a one-week high as investors looked ahead to weekly supply data from the U.S., while monitoring disruptions to Libyan crude production.
Optimism that an OPEC-led production cut deal will be extended through the end of the year further supported prices.
U.S. crude oil futures gained 0.62% to $48.67 at 5:57AM ET (9:57GMT), while Brent oil traded up 0.66% to $51.76.
The U.S. Energy Information Administration will release its official weekly oil supplies report at 10:30AM ET (14:30GMT) Wednesday. If the increase is confirmed, it would be the 12th weekly build in the past 14 weeks.
After markets closed Tuesday, the American Petroleum Institute (API) said that U.S. oil inventories rose by 1.9 million barrels in the week ended March 24, more than expectations for a build of just 300,000 barrels, although the report also showed a drop of 1.1 million barrels in gasoline stocks, while distillate stocks declined 2.0 million barrels.