Gold dives on NY GLOBEX Open and recovers
S&P 500 Index contracts expiring in March slid as much as 1.5% in early Asian trading Monday after finance chiefs and central bankers from the world’s largest economies said they see downside risks to growth persisting as the deadly virus continues to spread. Dow Jones Industrial Average futures declined as much as 1.4%, while those on the Nasdaq 100 Index retreated as much as 1.8%. China’s coronavirus cases rose to at least 76,936 over the weekend, with a total of 2,442 fatalities. South Korea raised the country’s infectious-disease alert to the highest level after a 20-fold increase in cases. Italy – the virus’s epicenter in Europe, with 140 infections – canceled the Venice Carnival and other events.
10 YR Treasury breaking through this "tipping point" level requires more than 50% probability priced for the Fed cutting rates back to 0%! This means that breaking 1.4% in an on-hold context for the Fed creates a significant inversion of the curve, pushes recession signals higher, and pressures a further inversion of the FF1/FF6 spread which we found in Pricing cuts ahead of the Fed to have no false positives for Fed cuts following a -30bp inversion (currently -16bp).
https://www.cmegroup.com/trading/interest-rates/us-treasury/10-year-us-treasury-note.html
Oil prices fall 2% on demand concerns as coronavirus spreads outside China
Oil prices tumbled more than 2% on Monday as investors worried about a hit to demand from the coronavirus outbreak, which is spreading rapidly outside China. Brent crude fell by $1.50 or 2.5% to $57.00 a barrel by 2332 GMT. U.S. crude futures fell by $1.26 or 2.3% to $52.12.Concerns about the coronavirus grew on Sunday after sharp rises in infections in South Korea, Italy and Iran. South Korea’s government put the country on high alert after the number of infections surged to over 600 with six deaths, while in Italy, officials said a third person infected with the flu-like virus had died, as the number of cases jumped to above 150 from just three before Friday. Meanwhile, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman described as “nonsense” a media report that Riyadh is considering a break from the OPEC+ alliance with Russia. His comments followed a Wall Street Journal report that said Saudi Arabia was considering leaving the OPEC+ alliance as China’s coronavirus outbreak contributes to a drop in global oil demand. .
https://www.reuters.com/article/us-global-oil/oil-prices-fall-2-on-demand-concerns-as-coronavirus-spreads-outside-china-idUSKCN20H0UU
Economic Schedule for Week of February 23, 2020
The key reports this week are January New Home sales and the second estimate of Q4 GDP. Other key reports include Case-Shiller house prices and Personal Income and Outlays for January. For manufacturing, the February Dallas, Richmond and Kansas City manufacturing surveys will be released.
https://www.calculatedriskblog.com/2020/02/schedule-for-week-of-february-23-2020.html
https://www.kitco.com/charts/livegold.html
https://www.bloomberg.com/markets/stocks/futures
https://www.macrotrends.net/2566/crude-oil-prices-today-live-chart
CME FedWatch
Probabilities Ease 18.8 % No Change 81.2 % Hike 0.0 %
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html