News

Stronger Risk Sentiment Weighs on Dollar; Stock Futures Rally

USD

The dollar index, which measures the dollar against a basket of major currencies, drifted lower to 90.64, on enhanced risk sentiment. Investors are looking forward to Biden's inauguration and how he will implement his agenda. Janet Yellen will be testifying later today, where she is widely expected to support Biden's fiscal stimulus plans. On the other hand, the US 10-year yields, which boosted the dollar rebound, are currently hovering near 1.10%. The EURUSD bounced to $1.2098, and the GBPUSD rallied to $1.3614.

Equities

Major US stock index futures edged higher, recovering significantly from last week's losses on big stimulus plan and buy-the-dip strategy. Janet Yellen, Biden's nominee for Treasury Secretary, will be testifying later today, backing up Biden's approach of going for massive stimulus to boost the economic recovery. Investors are optimistic about the impact of more fiscal easing on the economy and the stock market. On the other hand, the buy-the-dip act from investors is dominating. The Dow Jones Industrial Average futures rose to 30926, the S&P500 futures rallied to 3795, and Nasdaq futures edged higher to 12946.

Metals

Precious metals prices inched higher as the dollar weakened and Treasury yields were flattish. The price of a gold ounce jumped to $1843 after touching support of $1802, the price of a silver ounce rallied to $25.30, while palladium futures eased slightly to $2363.

Oil

Oil prices moved slightly higher, trimming losses incurred during the past couple of days. Investors are weighing in the prospects of another severe spread of Covid19 in Asia, where oil-demand recovered the most. On the other hand, Saudi Arabia's cuts are managing downside risks along with Biden's massive fiscal stimulus plans. The West Texas Intermediate crude March delivery inched higher to $52.47, and Brent Blend March delivery rose to $55.16.

Major Economic Events

GMT Country Event Expectation Previous

10:00

EZ

German ZEW Economic Sentiment (Jan)

60.0

55.0

Tentative

US

Yellen Testifies

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-

 

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