News

Dollar Eases on Increased Rate-Cut Prospects

USD

The dollar index, which measures the greenback against a basket of major currencies, tumbled to 99.11 amid growing bets on monetary policy easing by the Federal Reserve. The US 10-year yields dropped to a record low of 1.353% as market participants believe that the effect of the Coronavirus on the global economic activity will force the Federal Reserve to cut interest rates. The CME Fed Watch tool is showing a probability of a 25 basis point rate cut in June, and another cut as soon as September. Market participants are looking forward to CB consumer confidence later on the day. The EURUSD is currently trading near $1.0860, the GBPUSD edged higher to $1.2962, and the USDJPY fell to 110.60.

Equities

Major US stock index futures settled sharply lower yesterday as the Covid19 outbreak outside China intensified growth concerns. South Korea, Italy, and Iran reported an increase in new coronavirus cases. The Dow Jones Industrial Average futures tumbled to an eleven-week low of 27844, the biggest one-day point drop in two years, the S&P500 futures declined to 3221, and Nasdaq futures fell to 9041. The Italian stock index extended declines today, falling to a low 23255.

Metals

Gold prices eased from a seven-year high as US yields bounced off record lows. The price of a gold ounce fell to $1633 after trading at a high of $1689 on growing chances of further monetary policy easing. The price of a silver ounce dropped to $18.26, while palladium futures edged higher to $2580.

Oil

Oil prices extended losses as the virus outbreak raised economic growth woes. Market participants are afraid that the current economic slowdown will negatively affect oil-demand levels. The West Texas Intermediate crude futures declined to $51.50, and Brent futures descended to $56.41. Market participants are looking forward to the weekly crude oil stock by the American Petroleum Institute later today.

Major Economic Events

GMT Country Event Expectation Previous

15:00

US

CB Consumer Confidence (Feb)

132

131.6

21:30

US

API Weekly Crude Oil Stock

-

4.2

 
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