News

Dollar Holds Gains; Tech Stocks Tumble despite Treasury Yields Slip

USD

The dollar index which measures the greenback against a basket of major currencies hovered near its highest level in four months trading at 92.67 as the economic outlooks diverged. The buck is gaining noticeable demand from the fact that rival economies are still struggling with covid19, just like what is happening in the Euro region. On the other hand, the Federal Reserve officials affirmed again that the pace of the economic recovery is strong. Market participants will be looking forward to fresh economic data to assess the impact of the recent stimulus rounds, and restrictions removed on the economic activity. The EURUSD slipped to $1.1804, the GBPUSD declined to $1.3673, while the USDJPY raced higher to 108.99.

Equities

Futures tied to major US stock indices settled in red yesterday despite a little slide in yields. Tech stocks suffered the most with Apple, Facebook, Netflix, and Tesla falling significantly, driving Nasdaq futures to a one-week low of 12750. The S&P500 futures declined for the second straight session to test a low of 3876. Meanwhile, the Dow Jones Industrial Average futures were strong at the beginning of the session as investors continue to prefer cyclical stock with the promising economic recovery, but failed to keep these gains and settled marginally lower at 32319.

Metals

Precious metals prices were mixed as investors await fresh fundamental drivers. The rising dollar is imposing pressure on prices, but the falling Treasury yields are helping. The price of a gold ounce settled higher at $1734, while the price of a silver ounce dipped to $24.96, driving the gold/silver ratio higher to 69.42, the highest since early February. Meanwhile, palladium futures jumped to $2640.

Oil

Oil prices rallied to the upside, recovering almost all losses incurred on Tuesday, as the ship stuck in the Suez Canal pose threats to supply. Reports mentioned that several oil carriers are stuck, holding around 13 million barrels. If this matter takes more time to be solved, it could support the price temporarily. On the other hand, the US Energy Information Administration reported a buildup in inventories for the fifth straight week, of 1.912 million barrels. The West Texas Intermediate crude May contract rose to $60.81, and the Brent Blend May contract rallied to $64.16.

Major Economic Events

GMT Country Event Expectation Previous

9:30

UK

 BoE Gov Bailey Speaks 

-

-

9:30

EZ

 ECB President Lagarde Speaks  

-

-

12:30

US

 GDP (QoQ) (Q4)

4.1%

33.4%

12:30

US

 Initial Jobless Claims

730

770

 

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