News

US Stock Futures Recover on Fed/Trump; Dollar Tumbles

Equities

Major US stock index futures surged recovering from sharp losses incurred last week supported by the Federal Reserve and President Trump. Ahead of the market close, the Federal Reserve declared the willingness to widen its asset purchases program to include buying individual corporate bonds, which would support a faster economic recovery. On the other hand, Bloomberg reported that the Trump administration is considering a $1 trillion infrastructure proposal. These developments were sufficient to boost investors' risk appetite and drive markets higher. The Dow Jones Industrial Average futures rose to 26356, the S&P500 futures rallied to 3123, and Nasdaq futures advanced to 9957.

USD

The dollar index, which measures the greenback against a basket of major currencies, drifted lower to 96.43 amid improved risk sentiment. The recent announcements from the Federal Reserve and Trump administration lifted risk sentiment, and investors favored risker currencies to the safe dollar. The EURUSD edged higher to $1.1352, the GBPUSD rose to $1.2686, and the risk-sensitive AUDUSD rallied to $0.6976. Market participants are looking forward to Powell's semiannual monetary policy testimony later today to grasp further insight into the future of the policy.

JPY

The Japanese Yen was softer against rivals as the risk-off mood took a hit. On the other hand, the Bank of Japan concluded its monetary policy meeting and kept policy settings unchanged, while governor Koruda reaffirmed the readiness to take further easing action if needed to support the economy.

Gold

Precious metal prices raced higher following the Fed's announcement of buying individual corporate bonds. The price of a gold ounce rose to $1732, the price of a silver ounce ascended to $17.45, and palladium futures advanced to $1973.

Oil

Oil prices recovered from the losses incurred during the first trading hours of week supported by improved sentiment. The prospects of having a second wave of coronavirus infections triggered fears of having lower oil demand again as countries could be forced to close their business activity one more time. However, the news of a $1 trillion infrastructure proposal eased woes and drove oil prices higher again. The West Texas Intermediate July delivery rose to $37.42, and Brent Blend August delivery advanced to $40.05.

Major Economic Events

GMT Country Event Expectation Previous

9:00

EZ

 German ZEW Economic Sentiment (Jun)

60.0

51.0

12:30

US

 Retail Sales (MoM) (May)

8.0%

-16.4%

13:15

US

 Industrial Production (MoM) (May)

2.8%

-11.2%

14:00

US

 Business Inventories (MoM) (Apr)

-0.8%

-0.2%

14:00

US

 Fed Chair Powell Testifies 

-

-

Disclaimer

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