News

US Stock Futures Extend Drastic Decline

Equities

Major US stock-index futures finished sharply lower for the second consecutive day amid growing concerns over the Coronavirus outbreak. Covid19 is spreading across the world and negatively affecting business expectations and economic outlook. The stock markets around the globe felt the heat where major US stock indices suffered their biggest declines in a long time. The Dow Jones Industrial Average futures tumbled to 26976, the S&P500 plunged to 3132, and Nasdaq futures declined to 8810. In Europe, the FTSE MIB extended selloff to trade at 23046 as Italy continued to record an increase in new cases, and the German DAX fell to 12606.

USD

The dollar index, which measures the greenback against a basket of major currencies, settled lower for the third consecutive day closing at 99.00 on heightened monetary policy easing prospects. Covid 19 weighed on the global economic outlook, forcing central banks to intervene to offset the negative consequences. The US 10-year and 30-year Treasury yields dipped to record lows as investors rushed to bond safety. The CME Fed Watch Tool is showing a probability of interest rate cut in April and another in July. The EURUSD rose to a two-week high of $1.0890, the GBPUSD edged higher to $1.3017, and the USDJPY declined to 109.89.

Metals

Gold prices recovered from yesterday's losses as the United States warned that the virus could turn into a pandemic. The price of a gold ounce inched higher to $1652 after finding support at $1625, the 50% retracement level of the last swing higher. Meanwhile, the price of a silver ounce rallied to $18.16, and palladium futures advanced to $2663.

Oil

Oil prices declined significantly amid mounting growth concerns as the Coronavirus expanded territory. Covid19 is affecting supply chains, production, flights, etc... leading to a drop in demand for oil. Market participants are hoping that OPEC+ will introduce new output cuts to offset the drop in demand. On the other hand, the American Petroleum Institute reported a buildup of 1.3 million barrels in weekly crude oil stock last week. The US Energy Information Administration will publish the official numbers today. The West Texas Intermediate crude futures dropped to $49.40, and Brent futures fell to $54.19.

Major Economic Events

GMT Country Event Expectation Previous

13:30

EU

ECB President Lagarde Speaks  

-

-

14:35

US

FOMC Member Kaplan Speaks  

-

-

15:00

US

New Home Sales (Jan)

710

694

15:30

US

Crude Oil Inventories

2.005

0.414

18:00

US

FOMC Member Kashkari Speaks 

-

-

21:45

NZ

Trade Balance(MoM)(Jan)

-545

547


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