Global markets stabilized yesterday after taking some losses a day earlier. Investors are on edge ahead of a vote on U.S. health care later today that could be a barometer for future Trump administration policies. Be prepared for some USD volatility with FED Chair Yellen speaking @GMT 12:45.
The Dow fell for a fifth straight session Wednesday as the broader market staged a modest rebound on the back of technology stocks. The Dow Jones Industrial Average, -0.03% shed 6.71 points to close at 20,661.30, its longest losing streak since January. The S&P 500, +0.19% edged up 4.43 points, or 0.2%, to finish at 2,348.45.
Crude oil prices touched a four-month low but swiftly erased intraday losses after EIA inventory data showed stockpiles added 4.95 million barrels. Brent crude reached $50.99 per barrel up 35 cents, or 0.7% from its last close. That came after Brent briefly dipped below $50 a barrel on Wednesday for the first time since November. WTI was up 37 cents, or 0.8% at $48.41 a barrel, after testing support at $47 overnight. Analysts said Brent had found technical support around $50 a barrel and was being pushed up as traders took new long positions after crude hit multi-month lows overnight.
In Tokyo, after a 2.1% drop on Wednesday, the Nikkei remains under pressure. It was the largest one-day decline since Trump won his election. The Nikkei, +0.23% hit six-week lows Thursday and briefly broke through 19,000 after the dollar fell below ¥111 overnight.
Gold prices rose for a sixth consecutive day, extending the longest winning streak since mid-January. The US Dollar edged lower against most of its major counterparts and Treasury bond yields declined as the priced-in Fed rate hike path continued to flatten. Not surprisingly, this offered a lift to non-interest-bearing and anti-fiat assets including the yellow metal.
EUR/USD slipped 0.19% to 1.0790, off the previous session’s six-week high of 1.0822. The greenback weakened after Chicago Federal Reserve President Charles Evans said on Monday that the Fed is on track to raise rates twice more this year, underlining the view that the central bank will stick to a gradual pace of tightening after last week’s rate hike.
Overnight RBNZ holds the cash rate unchanged at record low of 1.75% as expected. The Australian and New Zealand dollars were weaker, with AUD/USD down 0.43% at 0.7658 and with NZD/USD shedding 0.20% to 0.7026. Meanwhile, USD/CAD gained 0.32% to trade at a one-week high of 1.3395.
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