Interest Rates Cuts are back – G7 Conference Call

Based on the FED Funds futures market, investors strongly believe that the Federal Reserve will cut rates when they meet later within this month. The CME FedWatch tool indicates a 100% probability that the Fed will decrease the rates. Further to this Australia and Malaysia already lowered their overnight policy rate and cash rate by 25bps respectively. Markets anticipate similar actions from the majority of central banks.

Reviewing the Asian markets, Japan’s NIKKEI ended lower by 1.22% because Consumer Index fell to 38.4 in February which is the lowest in the last 4 months.  China’s Shanghai Composite closed in green (+0.74%) though the index lost intraday gains as investors have some doubts over the size of measures that policymakers will take.  KOSPI Composite and Hang Seng closed in profits +0.58% and 0.21% respectively.

The EU indices are following the US market’s momentum and are recovering a part of their previous losses. The reasoning remains the same as traders are discounting further stimulus measures news from the teleconference call that central bankers and G7 finance ministers will have later today.

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The US pre-trading session is currently neutral as all US indices had an amazing bullish run yesterday. Traders are expecting the next catalyst event.

Most commodities extend their gains with XAUUSD leading the upside rally. Naturally, if the policymakers proceed to cut rates, Gold will become a more attractive investment. USOil is being stabilized near the 48 area as it regained its earlier intraday losses.

Heading to the forex market, most pairs are consolidating near their tops or lows. EURUSD is trying to verify the 1.10 to 1.11 zone. GBPUSD is moving sideways near at 4 month’s lows.

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Today’s economic calendar includes the following news:

G7 Conference Call

US Democratic Primaries Super Tuesday


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