US Open – Possibly another buying opportunity is upon us, UK Chancellor quits, Oil’s tentative bottom, Metals diverge on virus spike, LATAM declines

Feb 13 15:02 2020 Print This Article

Wall Street seems to be buying the dip again.  Last night, risk aversion returned on news that China reported a sizable jump in new coronavirus cases.  The shock re-acceleration in number of cases delivered a blow to many optimistic outlooks that were targeting the virus to peak in a couple more weeks. 

Investors still want to buy any weakness as hopes are high China will have a strong rebound once this virus has peaked. Global central bank stimulus is still going to power these markets, but if China’s slowdown extends into the second quarter, stocks will struggle as the Chinese V-shaped recovery will likely turn into a U-shaped one.

Treasuries

Treasury yields are dropping as the flight to safety has money come into the backend of the curve.  The Treasury 10-year yield came off its lows after mixed inflation data confirms Wall Street’s belief that the Fed is not making moves anytime soon.  The annual pace came in hotter than expected at 2.5%, up from the prior 2.3%, but we will probably need to see a 3.0% print before we see inflation come into the PCE Core reading, which is Fed’s preferred reading on prices. 

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Market Pulse

Established in 2006, MarketPulse is a free news site that provides full-time coverage of the world's largest financial markets, focusing on forex, commodities, and global indices research and analysis. Armed with a global team of securities analysts and strategists, Market Pulse provides timely, accurate, and informative research on major macroeconomic trends, technical analysis, and worldwide events that impact different asset classes and investors.

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