News

US Equities Extend Gains; Dollar Slides Further

Equities

Major US stock index futures edged higher during the Asian session after a calm US session. The fundamentals remain the same for the equity markets. The COVID19 cases are dropping in the United States along with hospitalization. Also, vaccination is picking up the course. Meanwhile, US policymakers are preparing for the next fiscal stimulus package that would bolster the economic recovery. All these factors were translated to further highs in stocks, especially cyclical ones. The Dow Jones Industrial Average futures rose to a record of 31382, the S&P500 futures rallied to 3920, and Nasdaq futures advanced to 13749.

USD

The dollar index, which measures the dollar performance against a basket of major currencies extended losses, falling to 90.37, the lowest level in almost two weeks. The strong risk appetite continued to weigh on the traditional haven currencies, and investors were seen favoring riskier ones. Market participants are looking forward to Fed's Powell speech today about the US economic outlook, where an upbeat tone could provide a bit of support to bulls. The EURUSD inched higher to $1.2129 on optimism over Italy, the GBPUSD rallied to $1.3827, the highest since April 2018.

Metals

Precious metals price remained upbeat as the dollar continued to weaken along with US Treasury yields. The US 10-year yields dipped past 1.15% after testing 1.20%, the highest since March 2020. The bullion is shining again as an inflationary hedge with inflation expectations soaring. The price of a gold ounce rose to $1846, while silver was almost steady near $27.40, and palladium futures eased to $2320. Platinum soared to $1209, its highest price in six years.

Oil

Oil prices eased after a strong rally despite a drop in inventories as per the private survey. The American Petroleum Institute reported a decline of 3.5 million barrels in US crude inventories. However, the rally paused a little after seven straight days of gains. Market participants are looking forward to the official oil report by the US Energy Information Administration later today. The West Texas Intermediate crude March contract held steady near $58.20, and Brent Blend April contract dipped to $60.90.

Major Economic Events

GMT Country Event Expectation Previous

13:00

EZ

ECB President Lagarde Speaks

-

-

13:30

US

 CPI (MoM) (Jan)

0.3%

0.4%

15:30

US

Crude Oil Inventories

0.985

-0.994

17:00

UK

 BoE Gov Bailey Speaks 

-

-

19:00

US

Fed Chairman Powell Speaks

-

-

 

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