News

Dollar Index Continues Upside Rally, Powell’s Testimony Eyed

USD

The dollar index, which measures the greenback against a basket of major currencies, settled higher for the sixth consecutive day closing at a four-month high of 98.86. The economic indicators published last week signaled that the US economic activity picked up in January. Market participants will shift their focus today towards the semiannual monetary policy testimony, where they are looking for responses from Fed's Powell on the economic outlook and future path of the monetary policy. The EURUSD plunged to a four-month low of $1.0905, and the USDJPY inched higher to 109.94.

Equities

Major US stock-index futures recovered from early-Monday losses and rose to tackle another record high. Investors will continue to monitor the impact of novel Coronavirus on the global economic outlook, while strong US data helped to ease their concerns. Federal Reserve Chairman Jerome Powell will be testifying on the Semiannual monetary policy report before the House Financial Services Committee today, and the Senate Banking Committee tomorrow. The Dow Jones Industrial Average futures rose to 29349, the S&P500 futures climbed to a record high of 3363, and NASDAQ futures advanced to another record of 9583.

Metals

Gold prices faltered at a one-week high as US equities recovered, and the dollar extended upside rally. The price of a gold ounce plunged to $1565 after trading at $1577, the price of a silver ounce dropped to $17.71, while palladium futures bounced to 2278.

Oil

Oil prices rebounded higher as risk sentiment surged. The rally in the stock market supported oil benchmarks in finding support near a thirteen-month low. The West Texas Intermediate crude futures rose to $50.30, and Brent futures recovered to $54.14. The spread between Brent and WTI fell to $3.58 yesterday, the lowest since March 2018. Market participants are looking forward to Powell's two-day testimony, API crude oil stock, and EIA crude inventories.

Major Economic Events

GMT Country Event Expectation Previous

9:30

UK

GDP (QoQ) (Q4) 

0.0%

0.4%

9:30

UK

Manufacturing Production (MoM) (Dec)

0.5%

-1.7%

9:30

UK

Industrial Production (MoM) (Dec)

0.3%

-1.2%

14:00

EU

ECB President Lagarde Speaks

 

 

15:00

US

Fed Chair Powell Testifies 

 

 

15:00

US

JOLTs Job Openings (Dec)

7.00

6.80

21:30

US

API Weekly Crude Oil Stock

 

4.180


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