Stocks Move Higher Ahead Of Yellen SpeechThe U.S. dollar and precious metals may be sensitive to Yellen’s comments.
Treasury Secretary Nominee Janet Yellen Is Expected To Support The Huge Stimulus Package
S&P 500 futures are gaining ground in premarket trading as traders expect that Janet Yellen will support Biden’s $1.9 trillion stimulus package when she speaks before the Senate Finance Committee.
Yellen is projected to state that the stimulus package is a vital instrument in the combat against the consequences of the coronavirus pandemic, and that the U.S. debt burden is not a concern right now.
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Yellen is also projected to commit to market-determined exchange rate of the U.S. dollar, in contrast with the outgoing President Donald Trump who has many times stated that he wanted a weaker U.S. dollar.
However, it remains to be seen whether Yellen’s comments will provide additional support to the U.S. dollar which is currently losing ground against a broad basket of currencies. The new stimulus package may ultimately serve as a bearish catalyst for the American currency and push it to multi-month lows.
IEA Cuts Its Oil Demand Forecast
IEA decided to cut its oil demand outlook by 0.3 million barrels per day (bpd) due to continued problems on the coronavirus front.
This is not a big surprise to the market as traders are prepared to see poor demand data in the first quarter of 2021 due to lockdowns in Europe.
Another downside revision of the full-year oil demand forecast did not spoil the mood of oil traders, and WTI oil is currently trying to settle above $52.50.
Not surprisingly, oil-related stocks are set for a strong start of the trading session after the correction on Friday.
Precious Metals Lack Momentum As Higher Yields Reduce Demand For Gold And Silver
Gold and silver have been trying to stabilize after the sell-off which happened at the beginning of this year.
The recent rebound of the U.S. dollar put additional pressure on precious metals, but rising U.S. Treasury yields were the main negative catalyst.
The bond market may be sensitive to Yellen’s speech before the Senate Finance Committee, so gold and silver may have an active trading session today. Gold and silver mining stocks, which have recently suffered a significant correction, may also be volatile today.
For a look at all of today’s economic events, check out our economic calendar.