News

US Stock Index Futures Drop as IMF Revises Growth Estimates

Equities

Major US indices finished lower amid growing trade tensions between the United States and the European Union, and the downgrades of the global growth forecasts by the IMF.The Trump administration decided to impose tariffs on $11 Billion of EU products, bringing back the trade concerns to the table. On the other hand, the International Monetary Fund lowered the global growth estimates to 3.3% from 3.5% prior. The fund now expects the global economy to grow at its slowest pace in almost a decade citing risks to the downside from Brexit and trade disputes. The Dow Jones Industrial Futures dropped to a low of 26097, the S&P500 futures ended its eight-day winning streak and settled lower at 2882, and the Nasdaq futures declined to 7578. Investors will shift their focus towards the first quarter corporate earnings.

USD

The dollar index which measures the greenback against a basket of major currencies settled lower for the second consecutive day at 97.02. The JOLTS job openings dropped to 7.087 million in February from 7.625 million in January. Market participants await the release of March CPI figures and the Minutes of the last FOMC meeting to grasp hints about the performance of the US economy and the tone of the Federal Reserve. The US 10-year yields dropped to 2.481%, and the USDJPY tumbled to a low of 110.98.

EUR                                                                                  

The Euro traded in a tight range against the United States dollar ahead of the European Central Bank monetary policy meeting. The bank is widely expected to remain on hold after adjusting the forward guidance in the last meeting and provide clarifications about the new TLTROs. In his press conference, President Mario Draghi will likely confirm again the dovish tone of the ECB especially after the significant fall in the economic activity in the Eurozone and the drop in German bund yields. The EURUSD is trapped between a support zone near $1.1255, and a resistance zone near $1.1285.

Metals

Gold prices edged higher as the dollar declined along with Treasury yields. The gold ounce traded at a two-week high of $1306, the silver ounce finished marginally lower at $15.20, and palladium settled at $1390.

Oil

Oil prices retreated from a five-month high as the IMF downgraded the global growth estimates. The IMF expects the global economy to grow at its slowest pace in a decade which would affect the demand for oil. On the other hand, Russian President Vladimir Putin said that Russia is ready to sit down with OPEC+ to discuss supply cuts extension in the second half of 2019, but not ready to accept yet. The American Petroleum Institute reported that the weekly US crude oil stock rose by 4.091 million barrels last week. Market participants await the official numbers from the US Energy Information Administration. The West Texas Intermediate crude futures dropped to a low of $63.66, and Brent futures declined to $70.27.

Major Economic Events

GMT Country Event Expectation Previous

11:45

EU

ECB Interest Rate Decision (Apr)

0.00%

0.00%

12:30

EU

ECB Press Conference 

 

 

12:30

US

Core CPI (MoM) (Mar)

0.2%

0.1%

12:30

US

Core CPI (YoY) (Mar)

2.1%

2.1%

14:30

US

Crude Oil Inventories

2.294

7.238

18:00

US

FOMC Meeting Minutes 

 

 


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