Nasdaq
S&P futures trade lower in premarket after Fed’s chairman Jerome Powell warned for an uncertain path to recovery and more significant downside risks. Powell also rejected the negative interest rates scenario and reiterated the central bank’s will to use all tools available to fight the coronavirus impact on the economy.
Global Coronavirus cases surpassed 4.44 million, while the coronavirus deaths reached 298,000. In the U.S. cases have topped 1.43 million, with deaths today reaching 85,000.
On the data front U.S. initial jobless claims rise 2.981K in the week ended May 9, above the expectations of 2.500K, the Initial Jobless Claims 4-week average dipped from 4173.5K to 3616.5K. The Continuing Jobless Claims came in at 22.833M below the forecasts of 25.1M on May 1.
Meanwhile, President Trump continues to pressure the Fed for negative interest rates. In an interview also said that now he prefers a stronger dollar.
The Dow Jones futures are 0.52% lower at 23,038. The S&P 500 futures are 0.45% lower at 2,801 while the Nasdaq futures are 0.45% lower.
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European markets are over 2% lower by midday. The Bank of England Governor Bailey implied that the 200 billion bond purchase program would likely be extended in the next policy meeting which is scheduled for June 18. In the last MPC meeting, the majority wanted to wait while two members dissented in favour of an immediate increase of 100 billion purchases.
Dax is 2.21% lower at 10,310, while the CAC40 is 2.24% lower at 4,247. The ECB is also likely to increase the Pandemic Emergency Purchase Program (PEPP) as well, but the timing is less clear.
In commodities the Brent crude oil price trades 1.70% higher at $29.76 while the WTI June contract is 1.82% higher at 25.75. The IEA expects the crude oil supply to fall to a nine-year low in May, following the supply cuts from OPEC and Russia. IEA expects total supply to reach 88 million barrels per day in May. Now the International Energy Agency expects that the drop in crude oil demand would not be so severe as initially estimated, but the risk remains if the second wave of infections rises as the economies gradually reopen.
In the forex market, the central bank of Mexico will announce the decision on interest rates the market consensus is for 50 basis points cut to 5.50%. GBPUSD lower on rising UK debt worries, as of writing is 0.28% lower at 1.2194.