Revived Stimulus Hopes Push Stock Futures Higher; Dollar Drops


Major US stock index futures raced higher on renewed hopes of further fiscal stimulus. Following Trump's famous tweet of instructing his representatives to stop negotiating a new stimulus bill, he tweeted that he is open to agreeing on dedicated stand-alone bills to support airlines and the Paycheck Protection program for small businesses. His latest tweets revived the chances of a new stimulus and boosted investors' risk appetite. On the other hand, the Federal Reserve released the minutes of the last monetary policy meeting, which expressed the fed's readiness to act further to boost the economic recovery. The Dow Jones Industrial Average futures rose to a five-week high of 28394, the S&P500 futures soared to 3432, and Nasdaq futures advanced to 11571.


The dollar index, which measures the greenback against a basket of major currencies, drifted lower to 93.50, surrendering partial gains. The increased prospects of further fiscal and monetary stimulus weighed on the dollar. The FOMC meeting minutes highlighted a bit of a slowdown in recovery, which could trigger additional action. Also, on Tuesday, Fed's Powell was stressing on more fiscal stimulus to support the recovery of economic activity to pre-pandemic levels. The EURUSD inched higher to $1.1781, the GBPUSD rallied to $1.2956, and the AUDUSD surged to $0.7168.


Precious metals prices inched slightly higher as the dollar dropped along with US yields on growing chances of more stimulus. The price of a gold ounce rose to $1895, the price of a silver ounce ascended to $24.08, and palladium futures held steady near $2380.


Oil prices edged higher, supported by the heightened risk sentiment and the possible impact of Hurricane Delta on the US oil production. Trump's openness to approving stand-alone bills boosted risk appetite. Moreover, investors are carefully watching the effect of the Hurricane Delta on oil production in the Gulf of Mexico. On the other hand, the US Energy Information Administration reported a slight buildup of 0.501 million barrels in US inventories. The West Texas Intermediate crude November delivery rose to $40.36, and Brent Blend December delivery rallied to $42.49.

Major Economic Events

GMT Country Event Expectation Previous
11:30 EZ ECB Monetary Policy Meeting Accounts - -
12:30 US Initial Jobless Claims 820 837
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