Here is what you need to know on Tuesday, February 25:
Markets: S&P futures are on the rise after a massive sell-off in markets on Monday, with some indexes suffering the biggest daily drop in two years amid coronavirus fears. Investors are taking profits on US bonds, yet the ten-year Treasuries are still around the lows of 1.40%. Gold prices have dropped below $1,650 after hitting a seven-year high of $1,690. Oil prices are also attempting a recovery after the downfall on Monday.
See Gold may top $1,800 as coronavirus in Italy propels market panic – Interview with Kathleen Brooks
Currencies: Lower US bond yields sent the dollar down on Monday, with EUR/USD recovering to 1.0850, GBP/USD recapturing 1.29, and USD/JPY dropping below 111. Most of the dollar's losses are sustained into Tuesday.
Fed response: Bond markets are already pricing in two rate cuts this year with the first one coming in June. Lauretta Mester, President of the Cleveland branch of the Federal Reserve, has said she is monitoring markets but sees no substantial damage to the US economy so far. Narayana Kocherlakota, a former dovish Fed member, has said the bank should cut rates immediately.
US economic events: Robert Kaplan and Richard Clarida of the Fed will be speaking today. Several housing figures are of interest, and the Conference Board's Consumer Confidence gauge stands out.
See US Conference Board Consumer Confidence: Steady as the labor market goes
Coronavirus: The number of infections has surpassed 80,000. While most deaths cases are in China, Italy remains in the spotlight as the death toll climbs to seven with 50,000 people under lockdown. A Korean Air confirmed that a cabin crew member has tested positive as the number of cases in the country continues climbing. The World Health Organization declined to declare the respiratory disease a global pandemic for now.
Cures?: A new experimental trial by Gilead has been rushed in China while researchers in the US and Japan are also working on potential remedies.
Brexit: Andrew Haldane, member of the Bank of England, has said the uncertainty has mostly cleared around Brexit, but that does not mean imminent investment.
Cryptocurrencies are on the back foot, with Bitcoin trading around $9,500. Ranges have somewhat narrowed.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.