News

Dollar Inches Higher, Stock Futures Rebound ahead of Data

USD

The dollar index, which measures the greenback against a basket of major currencies, held prior gains and inched higher towards a two-week high of 91.43. The dollar strength came after the former Federal Reserve Chairwomen/ the current US Treasury Secretary mentioned that interest rates should rise to avoid overheating the economy. Her words sparked a rally in yields where US 10-year yields rose to 1.609% after testing a low of 1.557%. Yellen commented again on the matter and confirmed the Fed's independence in taking decisions that suit the economic situation. Market participants are looking forward to the ISM non-manufacturing data later. The EURUSD dipped to 1.1987, and the USDJPY rallied to 109.47.

Equities

Futures tied to major US stock indices recovered sharply during the Asian session. The equity market was under pressure ahead of Yellen's comments, and her comments fueled the downside move, especially in tech stocks. However, as she unwinded her statements, and expressed her respect for Fed's independence, investors sought a buying-the-dip opportunity. The Dow Jones Industrial Average futures rose to 34137, the S&P500 futures recovered to 4174, and the tech-heavy Nasdaq bounced to 13603.

Metals

Precious metals prices are having a roller-coaster trading mode. The prices were marching higher until US Treasury Secretary commented on rates, they changed course. The price of a gold ounce dipped to $1770 after trading at $1799, the highest since late February. The price of a silver ounce dropped to $26.30, while palladium advanced to an all-time high of $3017.

Oil

Oil prices marched higher as investors weigh the global economic recovery. The economic indicators continued to indicate a solid rebound in the economic activity. On the other hand, the American Petroleum Institute reported a decline of 7.668 million barrels in US oil stock. The official figures will be reported later today by the US Energy Information Administration. The West Texas Intermediate crude June delivery rose to $66.58, and the Brent blend July contract rallied to $69.86.

Major Economic Events

GMT Country Event Expectation Previous

12:15

US

 ADP Nonfarm Employment Change (Apr)

800

517

14:00

US

 ISM Non-Manufacturing PMI (Apr)

64.3

63.7

14:30

US

 Crude Oil Inventories

-2.346

0.900

 

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