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Market View

Interest Rates Cuts are back - G7 Conference Call

Tuesday, March 3, 2020 11:52 AM GMT

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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15m chart

GER30

FRA40

UK100

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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15min chart

EURUSD

GBPUSD

USDJPY

Today’s economic calendar includes the following news:

G7 Conference Call

US Democratic Primaries Super Tuesday

Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader. Opinions expressed in the report do not represent the opinion of ZuluTrade Social Trading Platform and do not constitute an offer or invitation to anyone to invest or trade.

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