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Market Snapshot – ECB Remains Dovish, US Futures Edge Lower

By:
FX Empire Editorial Board
Updated: Mar 4, 2019, 13:24 UTC

Global Stocks Mixed as Investors Await US Data and Fed Speakers European stock markets drift sideways with DAX managing slight gains while the Euro Stoxx

Market Snapshot

Global Stocks Mixed as Investors Await US Data and Fed Speakers

European stock markets drift sideways with DAX managing slight gains while the Euro Stoxx 50 is down -0.15%. Indices are stagnating at very high levels, but for now investors are hesitant of pushing things further, while awaiting key U.S. data and amid Fed musings about the number of rate hikes this year.

ECB and SNB officials meanwhile continue to stress that expansionary policies remain necessary as the ECB pushes back against recent rate hike speculations. Asian stock markets mostly closed lower as the quarter end approaches, with Australia outperforming.

US Futures edge lower after US GDP data and ahead of fed speakers. Investors will hear from Fed officials Mester, Kaplan, Williams and Dudley. New York Fed president William Dudley is probably going to be the most interesting because he is a permanent voter on the Federal Open Market Committee. He is expected to talk about current financial conditions and monetary policy.

US GDP Revised Higher to 2.1%, More Than Expected

The BEA revised US economic growth for Q4 to 2.1%, up from the previous reading of 1.8%. The data supports the expansion of the US economy as the increase was driven mainly by a sharp revision of consumer spending.

US Dollar index increased slightly after the data to trade higher at 100.04.

Oil Rises on Supply Disruption in Libya

Crude oil futures are trading lower after an early session rally failed to gain traction. Helping to pressure the market are concerns over the growing U.S. supply.

The support is coming from supply disruptions in Libya and growing optimism that the OPEC-led output cut by major producing countries would be extended beyond the June deadline. Additionally, imports dropped and exports rose, according to the U.S. Energy Information Administration.

Crude oil is up 0.79% to trade at $49.90, Brent oil trades at $52.85, 0.63%.

ECB is Expected to Maintain its Low Interest Rate Policy

The dollar gained strength against the Euro following a report by Reuters that European Central Bank policymakers were wary of changing their policy message.

The ECB member Liikanen says that the central bank needs to keep commitment on forward guidance. Another confirmation that the central bank is still standing firmly behind its dovish forward guidance and the implicit easing bias, with ECB officials clearly pushing back against rate hike speculation after Nowotny’s musings on exit strategies and the deposit rate, which are clearly not an issue for now and although there are demands to at least remove the easing bias, rate hikes won’t be on the agenda for this year at the very least.

Gold Prices Edge Down on Stronger Dollar

Gold futures are under pressure on Thursday, pushed lower by the stronger U.S. Dollar and increased demand for higher risk assets like stocks. Underpinning prices and perhaps preventing a wash-out to the downside are concerns over Brexit, the French election and to some extent, President Trump’s inability to move forward with his economic policy plans.

On the other hand, investors hope that Trump’s attempt to pass his healthcare plan will not fail his fiscal policy plans.

Gold is trading at 1249.5, down 0.31%.

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