News

Stock Futures Extend Losses as COVID19 Weighs on Outlook

Equities

Major US stock-index futures dropped further as the second wave of Coronavirus continued to weigh on the global economic outlook. Governments around the world are moving back to movement restrictions to halt the spread of the virus, which is weighing on business expectations. Moreover, the ECB president Christine Lagarde expressed concerns about the growth in the fourth quarter in the Euro region. Meanwhile, in the United States, political parties are getting ready for election day, dropping efforts to reach a compromise on the virus relief bill. The strong rebound in economic activity during the 3rd quarter shown in the preliminary reading of the GDP failed to boost risk appetite. The Dow Jones Industrial Average futures declined to a three-month low of 25951, the S&P500 futures tumbled to 3225, and Nasdaq futures fell to 11038.

USD

The dollar index, which measures the greenback against a basket of major currencies, advanced to a one-month high of 94.10, supported by the flow to safety. The growing concerns over the global economic activity amid COVID19 resurgence suppressed the appetite towards risk. On the other hand, the solid preliminary reading of the third-quarter GDP made the dollar more attractive compared to rivals.

EUR

The euro extended losses against counterparts as covid19 cases continued to soar in the region. Governments are adopting lockdown measures again to stop the spread, which will affect the economic recovery. The European Central Bank kept monetary policy unchanged, but expressed willingness to act to curb the impact of the second wave on the economy. The EURUSD plunged to a one-month low of $1.1650 to find support at the 100-day simple moving average.

Metals

Precious metals were almost flat this morning following sharp declines incurred as the dollar surged. The price of a gold ounce held steady near $1870, the price of a silver ounce traded near $23.25, and palladium futures found support at the 100-day simple moving average at $2190.

Oil

Oil prices dived to their lowest levels since June as the demand outlook deteriorated amid soaring covid19 cases around the world. Investors are afraid of a sharp drop in oil-demand levels due to lockdowns, and producers will delay any actions to support the market. The West Texas Intermediate crude December delivery fell to $34.90, and Brent Blend January delivery declined to $37.35.

Major Economic Events

GMT Country Event Expectation Previous

9:00

EZ

 German GDP (QoQ) (Q3)  

7.2%

-9.7%

10:00

EZ

 CPI (YoY) (Oct) 

-0.3%

-0.3%

10:00

EZ

 GDP (QoQ) 

9.0%

-11.8%

12:30

US

 Core PCE Price Index (MoM) (Sep)

0.2%

0.3%

12:30

US

 Personal Spending (MoM) (Sep)

1.0%

1.0%

12:30

CA

 GDP (MoM) (Aug)

0.9%

3.0%

 

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