News

Stimulus Hopes Drive US Stock Futures Higher, Gold to Record

Equities

Major US stock-index futures extended upside rally supported by optimism over the new coronavirus stimulus package. The House of Representative Speaker, Nancy Pelosi, declared that she had productive talks about the next stimulus package with the Senate Minority Leader Chuck Schumer and the White House Chief of Staff Mark Meadows. Republicans and Democrats agreed on a $1200 stimulus check, which could support Americans through the impact of the COVID19 outbreak. The Dow Jones Industrial Average futures rose to 26923, the S&P500 futures rallied to 3318, the highest since February, and the tech-heavy Nasdaq advanced to a fresh record high of 11135.

Gold

Precious metals prices added to their previous gains amid growing bets of further stimulus to offset the effect of the continuous spread of Covid19 on the economic recovery. The US lawmakers are close to striking a deal over the new relief package ahead of the recess. The price of a gold ounce soared to a record high of $2039, the price of a silver ounce rallied to $26.63, the highest since March 2013, and palladium futures rose to $2221.

USD

The dollar index, which measures the greenback against a basket of major currencies, resumed its move lower, dropping to 93.02 on bets of further stimulus. The continuous outbreak of the coronavirus in the United States is weighing on the prospects of healthy and rapid economic recovery, raising the bets of further fiscal and monetary stimulus. The US treasury yields were also on the same wave, where the US 10-year yields fell to 0.505%. Market participants are looking forward to economic data to assess the economic recovery, among them the ISM non-manufacturing PMI, and the jobs report. The EURUSD edged higher to $1.1829, and the GBPUSD marched to $1.3123, and the risk-sensitive AUDUSD ascended to $0.7203.

Oil

Oil prices moved higher on hopes that further stimulus could boost the economic activity, and ensure that oil-demand levels would return near-normal levels. The West Texas Intermediate crude September delivery rose to $42.11, and Brent blend October delivery rallied to $44.86.

Major Economic Events

GMT Country Event Expectation Previous

8:30

UK

 Services PMI (Jul)

56.6

56.6

9:00

EZ

 Retail Sales (MoM) (Jun)

5.9%

17.8%

12:00

JP

 BoJ Governor Kuroda Speaks 

-

-

12:15

US

 ADP Nonfarm Employment Change (Jul)

1500

2369

12:30

US

 Trade Balance (Jun)

-50.10

-54.60

14:00

US

 ISM Non-Manufacturing PMI (Jul)

55.0

57.1

14:30

US

Crude Oil Inventories

0.357

-10.612

Disclaimer

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