News

Dollar Recovers; Equities Slip as Yields Rebound

USD

The dollar index which measures the performance of the United States dollar against a basket of the world's major currencies rebounded from a seven-week low of 90.85 to 91.27. The dollar has been on the backfoot since March 31st, where 10-year yields peaked at 1.77%. However, as yields bounced higher, the dollar trimmed losses against peers. Market participants are monitoring closely the new covid19 developments. The cases are soaring again globally, while the US continues with the massive vaccination plan, which could, later on, show a wide differential between economic activity relative to other economies. The EURUSD dipped to $1.2012, the GBPUSD fell to $1.3915, and the USDJPY held steady above 108.

Equities

Major US stock index futures settled lower for the second consecutive day. Investors are worried about the impact of the latest pandemic outbreak, especially in India, which could abrupt the global economic recovery. On the other hand, a profit-taking action was imminent after a tremendous rally. Market participants will now weigh additional economic data, aside from the first-quarter corporate earnings. The Dow Jones Industrial Average futures fell to 33570, the S&P500 futures plunged to 4109, and the tech-heavy Nasdaq dropped to a two-week low of 13708.

Metals

Precious metals prices inched higher during the Asian session as investors favored safety with the recent upsurge in covid19 cases. However, as yields rebounded metals pared gains. The price of a gold ounce dipped to $1781 after trading as high as $1788, the price of a silver ounce declined again below $25, while palladium inched higher to $2787.

Oil

Oil prices tumbled sharply as investors weigh the latest lockdowns in India. The covid19 cases are surging worldwide, especially in India, which recorded the largest one-day death toll since the beginning of the pandemic. Most of the country is on lockdown to ease the virus spread. On the other hand, the American Petroleum Institute reported a buildup of 436 thousand barrels in US crude oil stock. The US Energy Information Administration will publish the official results later on the day. The West Texas Intermediate crude June contract fell to $61.95, and the Brent blend June contract dropped to $65.83.

Major Economic Events

GMT Country Event Expectation Previous
10:30 UK  BoE Gov Bailey Speaks  - -
12:30 CA  CPI (MoM) (Mar) 0.6% 0.5%
14:00 CA  BoC Interest Rate Decision 0.25% 0.25%
14:30 US  Crude Oil Inventories -2.975 -5.889

 

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