• Stocks Rebound as Dollar Dips on Trump Revelations

Stocks recovered with oil while the dollar slipped as a fresh bout of political uncertainty in Washington damped optimism about a pick-up in global growth.

A gauge of the U.S. dollar was lower for a third day while Treasuries rose before a testimony by Janet Yellen that may provide clues about her plans to scale back the Federal Reserve’s balance sheet. Oil bounced on reports of a decline in stockpiles, though it remains in a bear market. S&P 500 index futures pointed to a higher opening.

The release of emails by Donald Trump Jr. about his controversial meeting with a Russian lawyer may be an unwelcome distraction for the Fed seeking to dismantle a decade of monetary stimulus. The scandal could delay fiscal stimulus initiatives in the U.S., keeping companies hesitant to deploy spending plans, commentators at Pacific Investment Management Co. to UBS Group AG warn.

“At the margin this does muddy the waters,” Bhanu Baweja a cross-asset strategist at UBS, said in an interview with Bloomberg TV. “There is greater political uncertainty. All of a sudden that capex rebound that all of us have been waiting for such a long time, might get postponed even further. It matters for the economy and therefore it matters for what the Fed is thinking medium term.”

The tightening cycle by many of the developed world’s central banks is expected to gain further momentum Wednesday from the Bank of Canada, which is expected to hike interest rates.

These are the main moves in markets:

Stocks

• The Euro Stoxx 50 gained 0.8 percent, led by automakers and energy companies, as of 7:31 a.m. in New York. The FTSE 100 rose 0.9 percent.
• S&P 500 futures added 0.2 percent.

Currencies

• The Bloomberg Dollar Spot Index fell 0.1 percent.
• The pound strengthened 0.2 percent to $1.2869 after U.K. payrolls data beat estimates and unemployment fell to a 42-year low, erasing an earlier loss.
• The yen gained 0.4 percent to 113.49 per dollar.
• The euro lost 0.1 percent to $1.1457.

Bonds

• The 10-year U.S. Treasury yield dropped two basis points to 2.34 percent.
• German benchmark bund yields fell three basis points to 0.6 percent.

Commodities 

• WTI crude climbed 1.6 percent to $45.73 a barrel.
• Gold was little changed at $1,217.20 an ounce.