S&P 500 futures are moving lower in premarket trading as traders wait for new catalysts after the major rally.
There are no important economic reports scheduled to be released today so traders will focus on general market sentiment and prepare for a busy week which will be full of earnings reports.
The companies’ earnings performance will likely have the biggest impact on markets in the first half of the week as the first important economic report, Initial Jobless Claims, will be published on Thursday. On Friday, traders will have a chance to take a look at flash readings of Manufacturing PMI and Services PMI reports.
Oil Pulls Back Amid Coronavirus-Related Problems In India
Yesterday, India reported more than 275,000 new coronavirus cases which was its new daily record. The number of new cases in India has been rising very fast in recent days, and it looks that the situation is out of control.
India is an important consumer of commodities so it’s not surprising to see that problems in India serve as a bearish catalyst for oil. However, it should be noted that India’s authorities have mostly ignored the second wave of the virus, and it remains to be seen whether it will have a material impact on the country’s oil consumption.
U.S. Dollar is Under Strong Pressure
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has managed to settle below the support at 91.30 and made an attempt to get below the next support level at the 91 level.
Interestingly, the U.S. dollar found itself under strong pressure in absence of any notable moves in U.S. government bond markets.
Weaker dollar is typically bullish for commodities, but their reaction is muted today. Copper looks strong at the start of the week, oil is under some pressure due to problems in India while precious metals are swinging between gains and losses.
It should be noted that continuation of dollar’s downside move will likely provide more support to commodities, which will be bullish for commodity-related stocks.