News

US Stock futures trim losses, Oil Prices Eyed

Equities

Major US stock-index futures recovered slightly from the steep losses incurred following the massive sell-off in oil prices. The move came after the Senate Republicans and Democrats passed a $484 billion coronavirus relief package for small businesses, hospitals, and testing. However, market participants will continue to focus on the developments of the oil market and the impact on the US oil and gas sector. President Donald Trump tweeted that his administration will never let the great oil and gas industry down, and instructed the Secretary of Energy and Secretary of Treasury to reach a plan to provide funds to the companies in need. The Dow Jones Industrial Average futures edged higher to 23197, the S&P500 futures rose to 2764, and Nasdaq futures rallied to 8535.

USD

The dollar index, which measures the greenback against a basket of major currencies, eased from a two-week high of 100.48 to 100.04 on prospects of further fiscal stimulus. The Senates approved a $484 billion relief package aiming at supporting small businesses. However, the performance of oil prices could keep the dollar-safety in demand. Also, oil prices collapse drove Treasury yields lower where the US 10-year yields fell to 0.511%, and the US 30-year yields tumbled to a six-week low of 1.125%. The EURUSD inched higher to 1.0873, the GBPUSD recovered to $1.2343, and the AUDUSD climbed to 0.6352 on upbeat retail sales data.

Gold

Gold prices fell to a two-week low of $1661 yesterday amid demand for cash as oil prices sparked fresh investors woes. The demand for safety, and the need for cash are currently the key movers for gold prices. The demand for safety is pushing gold prices higher, while the need for cash is weighing on prices. As stocks tumble investors rush towards safer assets, but also they are accumulating cash to protect themselves against another sell-off in stocks. Spot gold prices managed to recover during the Asian session and rose to $1699, the price of a silver ounce fell to a two-week low of $14.54, and palladium futures plunged to a one-month low of $1765.

Oil

Oil prices remained under significant pressure amid a supply glut and lack of storage capacity. The coronavirus continued to suspend the economic activity around the world, driving oil-demand levels lower, while producers are still pumping fuel, and they are running out of place to store it. The West Texas Intermediate future June contract erased Asian session gains and fell to $10.26, and the Brent future June contract tumbled to $15.98, the lowest since 1999. Market participants are looking forward to any measures to be taken by producers to relieve the oil markets.

Major Economic Events

GMT Country Event Expectation Previous

12:30

CA

 CPI (YoY) (Mar)

1.3%

2.2%

14:30

US

 Crude Oil Inventories

11.676

19.248

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