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U.S. Prelim GDP, Goods Trade Balance, Crude Oil Inventories

calendar 28/02/2024 - 09:16 UTC

The dollar posted a small recovery against most major currencies on Tuesday and continues to gain further early on Wednesday. The dollar index (USDX) is seen trading around 0.30% higher than Tuesday’s opening price, as of 10:15 AM, ahead of key growth data and comments from FOMC members that could provide some indication regarding the timing of the Fed’s first step towards monetary easing.

According to the CME Fedwatch tool, the possibility that the first rate cut in 2024 will take place in the May FOMC meeting rose from 15% to 20.7% while the same possibility for a rate hike taking place in June fell from 53.4% to 49.8%.

Wall Street’s continues to lose momentum on Tuesday, with all three main stock indices ending the session with a small drop for a second consecutive session. Investors appear to remain on the sidelines ahead of the upcoming PCE price index data released on Thursday where an increase to 0.4% is expected in the price of goods and services purchased by consumers, excluding food and energy, after a reading of 0.2% in last month’s report.

In company news Zoom rose by approximately 8% after reporting stronger-than-expected earnings, while also announcing a $1.5 billion share buyback, while Unity Software fell by more than 6% after the videogame software maker reported weaker-than-expected guidance amid a plan that includes exiting some businesses. Several big market players announce their Q4 earnings reports today among which are Novavax, Paramount, snowflake, C3.ai, AMC, Salesforce, okta and Zuora.

On the energy front, the two main crude benchmarks WTI and Brent both rose by 0.98% and 0.77% respectively on Tuesday, for a second consecutive session, supported by escalating geopolitical tensions in the Middle East and as reports indicate that OPEC+ is considering extending voluntary oil output cuts into the second quarter to provide additional support.

For today, investors focus could shift towards quarterly GDP numbers from the US, goods trade balance and wholesale inventory data and crude oil inventories. In addition, Fed officials Bostic and Williams are due to speak on the outlook for monetary policy.


The EUR/USD pair posted minor losses on Tuesday ending the session 0.08% lower.

Data-wise, the US economic docket featured Durable Goods Orders for January, which plunged more than the -4.5% contraction, down -6.1% MoM, below December’s -0.3% drop.

Across the pond, GfK revealed that German consumer sentiment stabilized at lower levels in March, coming at -29.0, a tick higher than February’s -29.7.

At the same time, Eurozone (EU) lending halted in January, as the European Central Bank (ECB) reported that M3 annual growth was 0.1% less than estimates of 0.3%. Recently, some European Central Bank (ECB) speakers, led by President Lagarde, had expressed that the inflation battle hasn’t been won.

Ahead in the week, the EU’s docket will feature the Economic Sentiment Index. In the US, the second estimate of the Gross Domestic Product (GDP) and Fed speakers could spark some volatility in the EUR/USD pair.



Gold prices held almost unchanged on Tuesday ending the session with minor losses of 0.06%, with key inflation reading and comments from Federal Reserve officials on investors' radar this week.

At least ten Fed officials are due to speak this week, while the core personal consumption expenditures price index, the Fed's preferred inflation gauge, is due on Thursday. Recent comments from Fed policymakers suggested that the U.S. central bank is in no rush to cut rates. Data showed U.S. durable goods orders posted the largest drop in nearly four years in January.



Oil prices rose more than $1 a barrel on Tuesday as sources said OPEC+ is considering extending voluntary oil output cuts into the second quarter to provide additional support.

Also supporting prices on the supply side, Israel and Hamas, as well as Qatari mediators, all sounded notes of caution about progress towards a truce in Gaza, after U.S. President Joe Biden said he believed a ceasefire could be reached in under a week to halt the war for Ramadan.

Markets also expect to see some improvement in Chinese oil demand as improving travel demand over the Lunar New Year holiday outweighed worries of slowing macro-economic indicators.


US 500

U.S. main indexes remained within a range established over the past sessions. At the close, US 500 and US Tech 100 gained 0.15% and 0.23% respectively while US 30 was dragged lower 0.34% by losses in UnitedHealth Group Incorporated after the Wall Street Journal reported that The Department of Justice had launched an antitrust investigation into the health insurer.

Focus was largely on a string of key economic readings due on Wednesday and Thursday, starting with a second reading on fourth-quarter GDP data.

Fourth-quarter earnings continued to trickle in, as the season wound to a close. Beyond Meat Inc surged 76% in aftermarket trade after clocking better-than-expected quarterly earnings and forecasting stronger margins. E-commerce site eBay Inc rose 4% on stronger-than-expected earnings, while Ambarella Inc rose 12% on a smaller-than-expected loss.

US 500

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