European stock futures are trading lower as traders are concerned that coronavirus cases have started to rise again. They believe that this has led governments to roll back some of the restrictive measures in Europe. For instance, Germany, the largest economy in the Eurozone, has decided to extend the lockdown for another month.
Chancellor Angela Merkel and regional leaders agreed yesterday that it would be in the country’s best interest to extend the lockdown over Easter in order to avoid the third wave. Private gatherings will be limited once again, and public gatherings banned. Citizens will be encouraged to stay home.
Over in the U.S., traders are going to keep a close eye on the dollar index and the Treasury yields ahead of a series of U.S. Treasury auctions. These events will once again test the bond yields and their demand. So far, it seems like Treasury yields have stopped climbing further; the 10-year U.S. Treasury yield fell yesterday and moved further away from its 14-month high.
In the currency market, traders are keeping an eye on the Turkish Lira, which recovered over 10% of its losses yesterday. There was no doubt that the currency was oversold, and the move was based on speculation. But the Central Bank needs to do a lot more convincing before we can say that the selling pressure has eased off. The downward trend is still strong, and it is likely that we may see the USD/TRY reaching towards the 8 dollar mark again.
As for the Euro, the ECB proved yesterday that it’s not only capable of jawboning, but it is ready to put its money where its mouth is. The European Central Bank increased its asset purchase under its Pandemic Emergency Purchase Programme, the weekly report of bond-buying confirmed yesterday. The idea here is to really stop the bond yields from soaring any further, but many believe that the bank’s purchase of assets isn’t going to reverse the direction of bond yields.
In the commodity trading space, gold prices continue to slip further because of the general weakness in the market. It seems like traders are really struggling to push the gold price above the $1,750 mark, and if the gold price cannot move above this price level, then the likely chance is that we may see the gold price moving back towards the mid $1600 price range.
We are not seeing much bullish momentum returning for the Bitcoin price either. The cryptocurrency king has been deflating since yesterday, and it seems like that the sell-off is becoming intense. The thing to worry about Bitcoin is that there is plenty of good news, but nothing is really pushing the markets higher. This means price exhaustion and a possibility of further correction in the Bitcoin price.
Oil prices are somewhat steady on Tuesday, but investors are concerned that oil demand is going to face a difficult time in the coming days because of the rollback of the coronavirus measures in a number of European countries. Both Brent and Crude oil have seen over a 6% drop last week–the worst weeklyly drop for oil prices this year. Oil producers are still optimistic as they believe demand recovery is taking place, but it will take some time. (More on oil trading)