Top 5 Things to Know in The Market on Monday

Investing.com - Here are the top five things you need to know in financial markets on Monday, December 3:

1. U.S., China Reach Trade Truce

Fears over a full-blown trade war eased after the U.S. and China, the world's two largest economies, agreed to a 90-day ceasefire in their longstanding trade dispute.

U.S. President Donald Trump and Chinese President Xi Jinping agreed to hold off on additional tariffs on each other's goods at the start of the new year to allow for talks to continue, the White House said in a statement Saturday.

The U.S. agreed to leave tariffs on more than $200 billion worth of Chinese products at 10%. If after 90 days the two countries are unable to reach an agreement, that rate will be raised to 25%.

The announcements came after Trump and Xi sat down with their aides for a working dinner at the end of the G20 summit in Argentina.

Tensions between the two economic superpowers have dominated headlines for most of the year, with both sides imposing tit-for-tat tariffs on each other's products. The standoff had raised fears among investors that the global economy could be dragged down by the dispute.

2. U.S. Futures Point to Sharply Higher Open

U.S. stock futures pointed to strong gains at the start of the trading week, with Dow futures jumping more than 500 points.

At 5:35AM ET (1035GMT), the blue-chip Dow futures were up 513 points, or about 2%, the S&P 500 futures rallied 50 points, or around 1.8%, while the tech-heavy Nasdaq 100 futures indicated a gain of 180 points, or 2.6%.

Elsewhere, European stocks started the week on the front foot, with all the major bourses in the region posting solid gains. Among national indices, Germany's DAX was the best performer, surging 2.7%.

Earlier, stocks in Asia closed higher. Mainland Chinese markets saw the biggest gains on the day, with the Shanghai Composite finishing up around 2.6%.

3. Oil Prices Surge

In commodities, oil prices jumped, as a trade ceasefire between the U.S. and China sparked demand for riskier assets.

U.S. West Texas Intermediate crude futures rose by as much as $2.92, or 5.7%, to a high of $53.84, before easing slightly to $53.10, still up $2.23, or 4.4%.

International Brent crude oil futures rallied by $2.37, or 4%, to $61.80, having risen earlier by as much as $3.14, or 5.3%, to $62.59.

Oil also received support amid growing expectations that major producers, led by Saudi Arabia and Russia, will agree some form of production cut at a key meeting of OPEC ministers in Vienna later this week.

Read more: Commodities Week Ahead: How Reliable Are Trade And Oil Cut Promises?: Barani Krishnan

4. Dollar Slips

In currency markets, the dollar was broadly lower.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.3% to 96.87.

The euro gained ground against the dollar, with EUR/USD advancing to 1.1345.

The pound was also higher, with GBP/USD rising to 1.2745.

The Australian and New Zealand dollars, often viewed as barometers for global risk appetite, were sharply higher, with AUD/USD up 1% to 0.7378 and NZD/USD climbing 0.7% to 0.6917.

In the bond market, U.S. Treasury prices edged lower, pushing yields higher across the curve, with the benchmark 10-year yield rising to 3.04%.

5. Fed Speakers, Data to Grab Attention

A number of Fed speeches will get the market's attention.

Federal Reserve Governor Randal Quarles will speak about the economic outlook and monetary policy at the Council on Foreign Relations, in New York, at 8:00AM ET (1300GMT).

Federal Reserve Bank of New York President John Williams is then due to deliver opening remarks at The Evolving Structure of the US Treasury Market conference, hosted by the New York Fed, at 9:15AM ET (1415GMT).

Federal Reserve Governor Lael Brainard will speak at the same event later in the day.

Their comments will be useful for investors who have been scaling back their expectations for future rate hikes following recent remarks from a number of Fed officials that were interpreted as dovish.

On the data front, the economic calendar is busy today.

The highlight will be the November reports on manufacturing activity from Markit Economics and the Institute of Supply Management due at 9:45AM ET (1445GMT) and 10AM ET (1500GMT) respectively. Investors will pay particular attention to the surveys for any impact tariffs are having on the sector.

Reports on construction spending and auto sales for November are also on the agenda.

-- Reuters contributed to this report

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