Here are the top five things you need to know in financial markets on Monday, February 22:
1. London mayor backs “Brexit” from EU, sterling slumps 1%
Investors continued to focus on discussions over a possible British exit from the European Union (EU), with a referendum now set to be held in June.
On Sunday, London Mayor Boris Johnson announced that he was supporting the "leave" campaign, dealing a blow to Prime Minister David Cameron's "stronger together" campaign.
The sterling fell the most since May 2010 on the news.
GBP/USD dropped 1.69% stood at 1.4164 at 11:00GMT or 6:00AM ET.
GBP/JPY also fell 1.22% to 160.30.
EUR/GBP traded up 1.10% at 0.7812.
2. Eurozone business activity hits 13-month low
Business activity in the euro zone grew at the slowest rate for over a year in February and deflationary pressures intensified.
In a report, market research group Markit said that its Flash Euro Zone Composite Output Index, which measures the combined output of both the manufacturing and service sectors dropped from 53.6 in January to 52.7 in February, a 13-month low and below forecasts for 53.3.
Commenting on the report, Chris Williamson, Chief Economist at Markit, noted that economic growth for the region is “likely to slow below 0.3% in the first quarter unless we see a sudden uplift in March, which on the basis of the forward-looking components of the PMI seems unlikely.”
“Disappointing PMI survey data for February greatly increase the odds of more aggressive stimulus from the ECB in March,” Williamson added.
3. Oil prices bounced back 3% on Monday
Crude recovered on Monday, after oil prices fell sharply on Friday, as market players continued to focus on a global supply glut and amid doubts over the likelihood of a collective cut happening anytime soon.
Black gold found some solace in Baker Hughes data that showed U.S. oil drillers have reduced the number of rigs they are using to the lowest level since December 2009, suggesting the possibility of lower crude production.
In this context, crude oil futures for April delivery traded up 3.50% to $32.86 at 11:00GMT or 6:00AM ET.
Brent oil, for its part, gained 3.15% to $34.05.
4. Investors await U.S. manufacturing PMI data
In a light day for economic data, U.S. investors will focus on the publication, at 14:45GMT or 11:45AM ET, of the U.S. manufacturing PMI for February to take stock of the business activity in the sector.
Consensus forecasts the reading to slip 52.3, from January’s 52.4.
5. Global stocks post solid gains
Global stocks kicked off the week in the black.
In Asia, Nikkei 225 closed up 0.9% and S&P/ASX All Australian 200 gained 0.98%, while Shanghai traded rose 2.22%.
European stocks were up across the board, while the benchmark Euro Stoxx 50 jumped 2.38%.
Meanwhile, US futures pointed to a positive open with the blue-chip Dow futures gaining 1.16%, S&P 500 futures rising 1.15% and the Nasdaq 100 futures trading up 1.26%.