S&P 500 futures are moving higher in premarket trading while Treasury yields continue to pull back from recent highs.
The situation in the bond market has stabilized after the recent sell-off. Currently, the yield of 10-year Treasuries is near the 1.69% level, while the yield of 30-year Treasuries is close to 2.40% level.
This stabilization provides support to tech stocks which have recently shown their sensitivity to fluctuations in the bond market. Meanwhile, the U.S. Dollar Index, which has recently made another attempt to settle above the 92 level, failed to develop sufficient upside momentum and remains in the range between the support at 91.75 and the resistance at 92.
Interestingly, lower yields and weaker dollar failed to provide any support to precious metals. Silver managed to get out of the previous week’s range at $25.85 – $26.25 and is testing the support at $25.55 which is bearish for shares of silver miners while gold is also under pressure.
Turkey Fires Its Central Bank Governor
Turkey’s President Recep Tayip Erdogan decided to fire the country’s central bank governor after he delivered a bigger-than-expected rate hike. Erdogan believes that higher rates cause inflation, and Turkey has routinely changed its central bank governors in recent years.
The news was shocking for foreign exchange market traders, and lira is down by more than 10% against U.S. dollar. The key thing to watch in the current situation is whether other markets will react to these developments or the panic will be limited to Turkish markets. At this point, it looks like global markets have mostly ignored the developments in Turkey.
Oil Tries to Settle Above The $61 Level
WTI oil attempts to continue its rebound and tries to settle above the $61 level. WTI oil has recently tested the $58.50 level on fears about the third wave of coronavirus in Europe.
The recent Baker Hughes Rig Count Report indicated that the number of U.S. rigs drilling for oil increased by 9 to 318. While the number of U.S. drilling rigs continues to grow, U.S. domestic oil production has stabilized at 10.9 million barrels per day (bpd) which is a comfortable level for the oil market.
Meanwhile, oil-related stocks may continue to pull back as traders assess the risks of the third wave of the virus in Europe and its potential negative impact on the demand for oil.