Coronavirus Aid Package Negotiations Are Back In The Spotlight
Once again, traders turn their attention to coronavirus aid package negotiations amid signs that Democrats and Republicans may agree to a smaller version of the deal.
Yesterday, U.S. House Speaker Nancy Pelosi indicated that Democrats were ready to significantly decrease the size of their proposal to speed up negotiations.
Later, Reuters reported that an official from the Trump administration stated that some negotiators were willing to agree to a smaller version of the coronavirus aid bill worth about $500 billion.
There are few doubts that the U.S. economy needs another round of stimulus so any positive news on this front will provide additional support to stocks.
S&P 500 futures are little changed during the premarket trading session as traders want to see more details about the potential deal before pushing stocks to new highs.
Oil Lacks Momentum Despite Another Inventory Draw
API Crude Oil Stock Change report indicated that crude inventories declined by 4.3 million barrels. Today, the EIA Weekly Petroleum Status Report is set to confirm these numbers.
While crude inventories continue to decline, suggesting that oil demand rebounds, oil fails to gain any significant momentum. Meanwhile, major oil stocks like Exxon Mobil or Chevron are starting to lose ground.
At this point, it looks like market participants believe that coronavirus-related problems will not go away in the upcoming months and are unwilling to increase their bets on higher oil prices.
FOMC Minutes Are Set To Provide Additional Insight Into Fed’s Thinking
Later today, traders will have a chance to digest FOMC Minutes from the recent Fed meeting.
The key question for the market is whether Fed is ready to adopt an inflation target and prepare for inflation of more than 2% to revive the economy.
The Fed’s commentary is especially important for the U.S. dollar which continues to lose ground against a broad basket of currencies. Yesterday, the U.S. Dollar Index managed to get below yearly lows at 92.50 and tried to gain more downside momentum.
For stocks, weaker dollar is a positive catalyst. In case the U.S. Dollar Index tests the 92 level, S&P 500 may get to the test of the 3400 level.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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