Investing.com - Here are the top five things you need to know in financial markets on Monday, August 1:
1. Global stocks trade at 11-month highs
Global stock markets traded at 11-month highs on Monday, amid indications major central banks around the world will add to stimulus or refrain from reducing it in the coming months.
Wall Street stocks were poised to start August on a positive note, with U.S. equity futures pointing higher early on Monday after last week’s soft growth data lessened the threat of an early interest rate rise from the Federal Reserve.
Meanwhile, European stock markets were slightly higher in morning trade on Monday, as investors digested the results of the European Banking Authority's latest stress tests.
Earlier, Asian shares hit a one-year high after disappointing U.S. economic growth data reduced expectations of an imminent hike in interest rates.
2. U.S. dollar recovers from 5-week lows
The U.S. dollar inched higher on Monday, pulling away from a five-week low it hit on Friday following the release of disappointing U.S. growth figures.
The dollar index, which tracks the greenback against a basket of six peers, was up 0.15% at 95.67 in early trade on Monday, crawling away from its Friday low of 95.34, a level not seen since June 24.
New York Fed President William Dudley said at an international central bankers conference in Bali on Monday that investors are underestimating how many times policy makers in the world’s largest economy will raise interest rates.
He added that the Fed could hike rates before the November U.S. election if the economy and labor market improve quickly.
3. U.K. post-Brexit manufacturing activity tumbles to 3-year low
The U.K. manufacturing sector shrank at its fastest pace in more than three years in July, with the new orders index showing its biggest monthly drop in 18 years, another sign that the Brexit vote is hitting the country’s economic growth.
The Markit manufacturing purchasing managers index came in at 48.2, down from an initial reading of 49.1 and compared to 52.4 in June.
The disappointing result will put more pressure on the Bank of England to live up to expectations and cut interest rates on Thursday.
4. China's July PMI surveys diverge
China's manufacturing sector painted a mixed picture in July, with the official activity gauge unexpectedly slipping into contraction territory while another survey pointed to an expansion for the first time in 17 months.
The official manufacturing purchasing managers' index, which tracks the health of large and state-owned enterprises, fell to 49.9 in July from 50.0 a month earlier, the first contraction in five months.
Meanwhile, the Caixin manufacturing purchasing managers’ index, which covers a greater share of small-to-medium sized companies, rose to 50.6 last month, expanding for the first time in 17 months.
The 50-point mark separates expansion from contraction.
5. Oil stuck near April lows amid glut concerns
Oil prices fell back towards three-month lows on Monday, as signs of increasing production in the U.S. and rising output among members of the Organization of the Petroleum Exporting Countries weighed.
U.S. crude was down 55 cents, or 1.32%, to $41.05 a barrel, while Brent shed 62 cents, or 1.42%, to $42.91 a barrel.