News

Dollar Rises Along with Treasury Yields on Trade Optimism

USD

The dollar index, which measures the greenback against a basket of major currencies, extended gains to 98.23 supported by the ongoing market optimism. The recent trade developments lessened investors' woes over the economic outlook, as it would grant Federal Reserve more time to remain on hold.  The CME Fed Watch tool ruled out interest rate cuts till December 2020. The US 10-year yields climbed to a three-month high of 1.97%, the USDJPY edged higher to 109.48, and the EURUSD drifted lower to $1.1040.

GBP

The Bank of England concluded the monetary policy meeting by keeping policy unchanged. However, two out of nine members in the monetary policy committee voted for an interest rate cut due to increased downside risks from the global economy and Brexit uncertainty. The decision was followed by a presser by Governor Carney, which stated that the recent Brexit deal could create a possibility for a pickup in growth, and indicated the readiness to support the economy if downside risks emerged. The British pound tumbled as the monetary policy meeting raised the chances of an interest rate cut in 2020 to 80%. The GBPUSD fell to a two-week low of $1.2793, and the GBPAUD declined to a three-week low of 1.8540.

Equities

Major US stock-index futures hit a fresh record high amid ongoing optimism over trade. The U.S. and China agreed to cancel the tariffs implements during their trade war. The Dow Jones Industrial Average futures climbed to 27739, the S&P500 inched higher to 3090, and Nasdaq futures advanced to 8282.

Metals

Gold prices plunged as the dollar edged higher along with Treasury yields. The ongoing trade optimism lowered the chances of further monetary policy easing by the Federal Reserve. The price of a gold ounce dipped to a five-week low of $1460, the price of a silver ounce dropped to $16.93, and palladium held steady above $1800.

Oil

Oil prices continued to trade in a tight range awaiting fresh fundamental drivers. Both benchmarks drifted lower towards the bottom of the range where West Texas Intermediate crude futures traded at $56.50, and Brent futures declined to $61.65.

Major Economic Events

GMT Country Event Expectation Previous

13:30

CA

Employment Change (Oct)

15.9

53.7

13:30

CA

Unemployment Rate (Oct)

5.5%

5.5%

15:00

US

Michigan Consumer Sentiment (Nov) 

95.9

95.5

18:00

US

U.S. Baker Hughes Oil Rig Count

 

691

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