News

Dollar Slides as Treasury Yields Hold Steady

USD

The dollar index which measures the greenback against a basket of major currencies fell off a three-week high of 91.39 to settle at 90.78, as US Treasury yields held steady. Last week, the spark in yields drove the dollar higher against its peers, but as yields hold near their lowest range in a week, the dollar rally is losing fuel. Market participants are looking forward to a series of economic indicators this week, among them ISM non-manufacturing PMI, the jobs report, and a speech for Fed's Powell. The EURUSD rallied to $1.2093, the GBPUSD rose to $1.3966, and the AUDUSD recovered to $0.7838.

Equities

Futures tied to major US stock indices hovered in a tight range, as investors anticipate more economic data and any comments of Fed officials over the recent rally in Treasury yields. Last week, the soaring yields sent stocks tumbling, with the US 10-year yield crossing above the S&P500 dividend yield for some time before backing off. However, the stock benchmarks recovered at the beginning of the week with many positive factors supporting buying the dip phenomenon, among them progress on Biden's stimulus plan, and vaccination pace. The Dow Jones Industrial Average futures rose to 31520, the S&P500 futures rallied to 3888, and Nasdaq futures recovered to 13161.

Metals

Precious metals prices rebounded as the dollar weakened and yields steadied. The price of a gold ounce jumped to $1738 after trading as low as $1707, the price of a silver ounce held steady near $26.60, palladium futures eased to $2355, and platinum surged above $1200 again.

Oil

Oil prices continued to trade in a cautious mode ahead of the OPEC+ meeting.  OPEC Secretary-General is optimistic about the recovery of the energy markets. However, the market would have a better direction following the meeting. On the other hand, the American Petroleum Institute reported a sharp buildup of 7.356 million barrels in oil stockpiles, the largest since July. Investors will look forward to the official figures by the US Energy Information Administration later today. The West Texas Intermediate crude April futures rose to $60.13, and Brent blend inched higher to $63.18.

Major Economic Events

GMT Country Event Expectation Previous

9:00

EZ

 Services PMI (Feb)

44.7

45.4

9:30

UK

 Services PMI (Feb)

49.7

49.7

Tentative

-

OPEC Meeting

-

-

13:15

US

 ADP Nonfarm Employment Change (Feb)

172

174

14:45

US

 Services PMI (Feb)

58.9

58.3

15:00

US

 ISM Non-Manufacturing PMI (Feb)

58.7

58.7

15:30

US

 Crude Oil Inventories

-5.190

1.285

 

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