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    Markets Sank together with US Futures on Inflation Worries – May 19

    Oil Dipped, while Bitcoin Gave Up All Its Gains

    European and Asian markets sank on Wednesday, along with US futures. Worries about inflation and coronavirus carnage continuing elsewhere in the world dampened investors’ spirits. Treasuries slid, together with oil prices. The dollar index was at its lowest point since the beginning of the year. Yields on 10-year Treasuries advanced. 

    Bitcoin shed all its gains accumulated since Elon Musk announced on February 8 that Tesla would use corporate cash to buy Bitcoin and accept it as payment. Other cryptocurrencies followed suit and extended their losses, pushed down, in part, by the People’s Bank of China’s refusal to view digital money as a form of payment. 

    Oil prices dipped because US stockpiles have recently been rising. The possibility that Iran will soon bring its oil to the market also negatively affected oil prices. Australian stocks plummeted to the lowest levels in almost three months. In Hong Kong and South Korea, markets were shut for holidays. 

    These are the main markets’ moves traders should watch on Wednesday:

    Stocks

    The Stoxx Europe 600 lost 1% during the European session. Futures on the S&P 500 gave up 0.7%. Futures on the Nasdaq 100 retreated 1.1%. Futures on the Dow Jones Industrial Average decreased 0.5%. The MSCI Asia Pacific Index fell 0.7%. The MSCI Emerging Markets Index gave up 0.3%. 

    Currencies

    The euro retreated 0.1% to $1.2209. The Japanese yen slipped 0.2% to trade 109.16 per dollar. The offshore yuan sank 0.2% to trade at 6.4369 per dollar. The British pound decreased 0.2% to $1.4167. 

    Commodities

    Brent crude lost 1.5% to trade at $68.00 a barrel. Spot gold tumbled 0.5% to $1,861 an ounce. 

    Bonds

    The yield on 10-year Treasuries rose three basis points to 1.66%. Germany’s 10-year yield gained two basis points to -0.09%. Britain’s 10-year yield increased two basis points to 0.89%.

    Looking forward:

    • The Fed publishes minutes from its April meeting on Wednesday, which may provide clues to officials’ views on the recovery and how they define “transitory inflation.”
    • EIA crude oil inventory report is published on Wednesday.
    • St. Louis Fed President James Bullard and Atlanta Fed President Raphael Bostic to speak at separate events on Wednesday.
    • IMF Managing Director Kristalina Georgieva and ECB President Christine Lagarde speak at the Vienna Economic Dialogue on Thursday.
    • Euro-area finance ministers and central bank chiefs hold an informal meeting. A larger group of EU finance ministers and central bank chiefs will meet on May 22.

    Have a profitable trading day!

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