Oil hits two-week highs, US stock futures slide
SINGAPORE/LONDON, March 17 - Oil hit two-week highs on Monday, while U.S. futures slid and those in Europe edged up, as investors braced for more of the policy bombshells that have created a sharp divergence between the performance of U.S. markets and those elsewhere.
The week is packed with central bank meetings, including the Federal Reserve, the Bank of Japan and the Bank of England, all of which are widely expected to hold fire, as policymakers try to see through the current economic uncertainty.
Over the weekend the U.S. defense secretary said the country would continue attacking Yemen's Houthis until they ended attacks on shipping, which drove up oil prices on Monday as investors worried about possible disruptions to supply.
Oil prices LCOc1 initially rallied more than 1%, before paring some of those gains on the prospect of an imminent end to the Ukraine war, which could bring more Russian energy supplies back to Western markets.
U.S. President Donald Trump said he plans to speak to Russian President Vladimir Putin on Tuesday and discuss ending the war in Ukraine, after positive talks between U.S. and Russian officials in Moscow.
Brent futures LCOc1 were last up 0.61% at $71.01 per barrel, while U.S. crude futures CLc1 rose 0.63% to $67.60 a barrel.
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Shares in Europe rose on Monday, trading comfortably above last week's multi-week lows. The STOXX 600 .STOXX was up 0.4% on the day, bringing gains for the year to 7.6%, in stark contrast to the S&P 500 .SPX, which last week entered correction territory, with a year-to-date loss of 4.3%.
European stocks and the euro have rallied sharply this month, driven in large part by Germany's plan to overhaul its fiscal policy that includes a 500-billion euro ($540 billion) fund for infrastructure and changes to borrowing rules.
Germany's parliamentary budget committee on Sunday approved the bill, which will be voted upon in the lower house of parliament on Tuesday and by the upper house on Friday.
The euro EUR=EBS was perched near a five-month high on Monday and last bought $1.0881.
"The idea of Germany's fiscal loosening being more in the (euro)'s price will be assessed on Tuesday when the Bundestag votes on the package. It would be very (euro) negative if it fails to pass," said Paul Mackel, global head of FX research at HSBC.
In China, data on Monday showed retail sales growth quickened in January-February, while a series of new policy measure from Chinese authorities to boost domestic consumption had little impact on local stocks or the yuan itself, which was steady in the offshore market at 7.2409.
