Tuesday 24th March 2020
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U.S. futures climbed in early Asian trading Tuesday after Wall Street benchmarks closed at their lowest in more than three years. The dollar slipped against major peers.
Futures pointed higher in Japan and Hong Kong after a massive further wave of initiatives from the Federal Reserve helped ease some measures of corporate credit risk. Investors are now watching U.S. congressional talks on a fiscal package. Treasury yields retreated and oil clawed back some gains after plunging 29% last week.
The Fed said it will buy an unlimited amount of bonds to keep borrowing costs low and will set up programs to ensure credit flows to corporations and state and local governments. The cost to insure against corporate defaults fell and bond ETFs eligible for Fed purchases jumped.
The Fed’s efforts “have to be matched by much bigger and timely packages on the fiscal side, which in turn have to be effective in helping the economy in this downturn but also - importantly - in the recovery,” Anna Stupnytska, global head of macro, Fidelity International, said in a note.
Investors continue to look for fiscal packages and central bank support as economic forecasts are being slashed and Europe continues to struggle to curb the pandemic. German officials are said to be ready to help Italy get through the coronavirus pandemic and are prepared to support an emergency loan from the euro area’s bailout fund.
Elsewhere, the pound slumped after U.K. Prime Minister Boris Johnson ordered sweeping measures to stop people leaving their homes “at this moment of national emergency.” Oil added to gains.
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