US Futures Move Lower as New Strain Concerns Offset Stimulus Deal


Major US stock benchmarks drifted lower despite policymakers reaching a deal on fiscal stimulus. Congress sealed the deal regarding the coronavirus relief bill. The $900 billion package will be providing direct aid to US citizens along with aid for the unemployed. On the other hand, Congress has passed a one-day funding bill to avoid a government shutdown. However, despite all this happening, US stock futures failed to rally as the woes from a new strain of the coronavirus in the United Kingdom weighed on risk appetite. The Dow Jones Industrial Average futures declined to 30062, the S&P500 futures fell to 3694, and Nasdaq futures tumbled to 12722.


The dollar index, which measures the greenback against a basket of major currencies, edged higher to 90.49, rebounding from its two-year bottom, as risk-off mood dominated. Governments are adopting stricter lockdown measures again, as the coronavirus spread continued significantly. Moreover, a new strain of the virus appeared to be 70% more transmittable than the regular one is raising woes. Investors are concerned about the impact of lockdowns and the economic outlook. On the other hand, the deadlock in Brexit talks supported the flow out of European currencies. The EURUSD declined to $1.2178, and the GBPUSD fell to $1.3335


Precious metals inched higher as investors rushed to safety amid soaring covid19 cases and additional stimulus. The price of a gold ounce rose to 1906, the highest since Pfizer's vaccine announcement. The price of a silver ounce advanced to a three-month high of $27.40, while palladium futures hovered near $2370.


Oil prices declined sharply as the governments brought back lockdown measures to control the virus spread with new strain threatening going back to point zero. Investors are worried that these lockdowns would hit oil-demand levels again and urge further market support from oil producers. The West Texas Intermediate crude February delivery dropped to $47.41, and Brent Blend February contract plunged to $50.29.

Major Economic Events

GMT Country Event Expectation Previous
11:00 UK CBI Industrial Trends Orders (Dec) -39 -40
13:30 CA New Housing Price Index (MoM) (Nov) 0.9% 0.8%


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