News

Dollar Drifts Lower along with Treasury Yields, FOMC minutes in Focus

USD

The dollar index which measures the greenback against a basket of major currencies tumbled to a two-week low of 96.43 as investors shifted to riskier currencies. The ongoing optimism over a trade deal between China and the United States is enhancing investors' risk appetite. Moreover, the US Treasury yields declined where the US 10-year yields reached a low of 2.629%. Market participants are awaiting the release of the minutes of the last Federal Open Market Committee meeting to grasp hints about the future path of interest rates. The USDCAD dropped to a two-week low of 1.3183, and the USDCHF fell to a low of 1.0001. Also, the European currencies performed well against the dollar despite risks. The EURUSD rose to a high of $1.1358, and the GBPUSD jumped to a high of 1.3077.

Equities

Major US indices held last week's gains, supported by Trump's comments on the trade talks between China and the United States. Trump said that the trade talks are going well, and the key trade deadline is not a "magical date" which indicated that it could be pushed back. The Dow Jones Industrial Average futures rose to a high of 25957, the S&P500 futures traded at a high of 2784, and Nasdaq futures advanced to a high of 7094.

Metals

Metals prices soared as the dollar weakened along with Treasury yields ahead of the Fed meeting minutes. The gold ounce climbed to a ten-month high of $1346, the silver ounce jumped to a three-week high of $16.06, and Palladium hovered near a record high of $1504. The heavy demand by car makers and short supply are the factors behind strong moves in palladium prices.

Oil

Oil prices edged higher supported by OPEC-led supply cuts and optimism over trade. The output of Saudi Arabia in the first quarter of 2019 is expected to be much lower than the agreed level of 10.31 million barrels. Moreover, the ongoing turmoil in Venezuela and the US sanctions are affecting supplies. On the other hand, if China and the United States were able to strike a trade deal, it could provide a huge boost to the global economy. The West Texas Intermediate crude futures jumped to a fresh 2019 high of $56.75, and Brent futures hovered above $66.00. Market participants await the American Petroleum Institute to release the weekly US crude oil stock.

Major Economic Events

GMT Country Event Expectation Previous
19:00 US FOMC Meeting Minutes    
21:30 US API Weekly Crude Oil Stock   -0.998

 

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