News

US Stock Futures and Treasury Yields Decline; Dollar Races Higher

Equities

Major US stock-index futures plunged as the covid19 weighed on investors' risk appetite. The virus is negatively affecting the economic activity around the world, and the International Monetary Fund warned that it could drain the 2020 expected recovery. Market participants favored safer assets to stocks, where US bonds rallied to the upside while the Dow Jones Industrial Average futures tumbled to 28931, the S&P500 futures declined to 3355, and Nasdaq futures dropped to 9517.

USD

The dollar index, which measures the greenback against a basket of major currencies, extended gains rising to a fresh multi-year high of 99.81. Investors preferred the dollar to its rivals as the US economic outlook seems more solid than others. The US treasury yields declined to their lowest levels since September 2019 on safety demand. The CME Fed Watch tool is showing an elevated probability of an interest rate cut in the second half of 2020. Market participants will be looking forward to the economic indicators to grasp an insight into the effect of the Covid19 on the US economy. The EURUSD is holding near a three-year low of $1.0780, the GBPUSD declined to $1.2848, the AUDUSD tumbled to an eleven-year low of $0.6585, and the NZDUSD dropped to a four-month low of $0.6303.

Metals

Gold prices extended rally higher as the coronavirus spread lifts growth concerns. Governments and central banks are worried that if the outbreak continues, the global economy will suffer. As a result, central banks should intervene and ease their monetary policies to boost economic activity. The price of a gold ounce rose to a fresh seven-year high of $1636, the price of a silver ounce advanced to $18.60, while palladium futures held steady slightly below $2600.

Oil

Oil prices retreated from their highest levels since January amid growing demand concerns due to the coronavirus outbreak. The epidemic is weighing on global economic activity and leading to lower demand for oil. On the other hand, the US Energy Information reported a rise in US crude inventories by 0.415 million barrels last week. The West Texas Intermediate crude futures fell to $53.08, and Brent futures plunged to $58.33.

Major Economic Events

GMT Country Event Expectation Previous

9:30

UK

Manufacturing PMI (Feb)

49.7

50

9:30

UK

Services PMI  (Feb)

53.4

53.9

10:00

EU

 CPI (YoY) (Jan)

1.4%

1.4%

13:30

CA

 Core Retail Sales (MoM) (Dec)

0.4%

0.2%

14:45

US

 Manufacturing PMI (Feb)  

51.5

51.9

14:45

US

Services PMI (Feb) 

53.0

53.4

15:00

US

 Existing Home Sales (Jan)

5.43

5.54


Disclaimer
 

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