News

US Stock Futures Slide Further as Trump Bans Travel from Europe

Equities

Major US stock index futures tumbled sharply as the Coronavirus outbreak stretched. Trump announced the suspension of traveling from Europe to the United States for 30 days as a response to "foreign" coronavirus. Moreover, he stated that he would ask Congress for a payroll tax cut or relief. The stock futures dropped further into the negative territory as he concluded his speech. The Dow Jones industrial average futures dipped further into the bear market trading at a low of 22344, the lowest since December 2018, the S&P500 futures declined to 2612, and Nasdaq futures descended to 7601.

USD

The dollar index, which measures the greenback against a basket of major currencies, faltered near a one-week high of 96.69 and dropped to 96.08 as the United States banned travel from Europe for 30 days to fight the Coronavirus. The US Treasury yields resumed downtrend where the 10-year yields dropped to 0.734%, and the 30-year yields tumbled to 1.227%. The CME Fed Watch Tool continued to show a heightened probability for further monetary policy easing next week. The EURUSD edged higher to 1.1336, the USDJPY declined to 103.08, and the USDCHF fell to 0.9321.

GBP

The British pound lost ground against rivals following fiscal and monetary steps to ease the impact of the Coronavirus on the economy. The Bank of England lowered interest rates by 50 basis points to 0.25% from 0.75% prior. But, Governor Mark Carney stated that interest rates could dip further yet remain above 0%. On the other hand, the newly appointed Chancellor of the Exchequer Rishi Sunak unveiled a £30 billion fiscal stimulus to combat the Covid19. He believes that the impact will be significant but temporary. The GBPUSD fell to 1.2781, the GBPJPY declined to 132.34, and the GBPCHF dropped to 1.1946.

Metals

Gold prices rebounded from a one-week low following the United States measures to stop the Coronavirus outbreak. The price of a gold ounce inched higher to $1650. The rush to safe assets and liquidation to cover margin calls are after the market rally up and down. The price of a silver ounce dropped for the fifth consecutive day to $16.45, and palladium futures fell to $2099, as the virus outbreak is weighing on the industrial activity around the globe.

Oil

Oil prices extended losses as the virus outbreak continued to weigh on the economic outlook, while oil producers are launching a price war. Saudi Arabia, Russia, the United Arab Emirates, and Iraq are ramping up their production in April and offering sharp price discounts. Meanwhile, the US Energy Information Administration reported a buildup of 7.664 million barrels in US weekly crude oil inventories. On the other hand, oil demand levels will take an additional hit following the US travel ban. The West Texas Intermediate crude futures declined to $31.21, and Brent futures fell to $33.76. The spread between Brent and crude narrowed to $1.98, the lowest since July 2017.

Major Economic Events

GMT Country Event Expectation Previous

10:00

EZ

Industrial Production (MoM) (Jan)

1.4%

-2.1%

12:30

US

Core PPI (MoM) (Feb)

0.1%

0.5%

12:30

US

Initial Jobless Claims

218

216

12:45

EZ

Deposit Facility Rate (Mar)

-0.50%

-0.50%

12:45

EZ

ECB Marginal Lending Facility

0.25%

0.25%

12:45

EZ

ECB Interest Rate Decision (Mar)

0.00%

0.00%

13:30

EZ

ECB Press Conference 

-

-

Disclaimer 

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