• European indexes end higher for second day,
• US Dollar falls further,
The European Central Bank (ECB) announced new easing measures regarding collateral. According to the statement, “ECB adopts an unprecedented set of collateral measures to mitigate the tightening of financial conditions across the euro area."Measures include a temporary increase in the Eurosystem’s risk tolerance in order to support credit to the economy, easing conditions for the use of credit claims as collateral, the introduction of a general reduction of collateral valuation haircuts, and a waiver to accept Greek sovereign debt instruments as collateral in Eurosystem credit operations. The ECB mentioned it “will assess further measures to temporarily mitigate the effect on counterparties’ collateral availability from rating downgrades”.
Oil prices erased some of the early gains despite hopes that OPEC and Russia will agree to cut production at a meeting on Thursday. OPEC announced that is willing to take coordinated actions with other oil-producers in order to stabilize the market. However potential cuts will depend on volumes other producers like the US are willing to cut. Earlier this session, Brent prices rose more than 3% to above $34 a barrel. The US crude traded around $26.6 a barrel after hitting a session high of $27.23.
Gold prices are trading slightly lower as risk-on moods prevailed on the markets today. The Dollar index dropped below 100.00 price level, as investors risk appetite carries forward from the prior trading session. If the shift in sentiment lasts, the US Dollar could remain under pressure while coronavirus fears fade.
Economic calendar for Wednesday is almost empty. Besides FOMC Meeting Minutes and Crude oil inventories, there are no major, market moving data scheduled for release tomorrow, therefore trading is likely to be dominated by headline news.
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