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Dow Jones, S&P 500 Wary of Quadruple Witching Volatility - US Market Open

Dow Jones, S&P 500 Wary of Quadruple Witching Volatility - US Market Open

2020-03-20 13:35:00
Justin McQueen, Analyst
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Dow Jones, S&P 500, Canadian Dollar Analysis & News

Dow Jones, S&P 500 Wary of Quadruple Witching

While equity markets appear to have stabilised with US equity futures looking to make back to back gains for the first time this month. We are cognizant of the fact that today is quadruple witching, therefore market participants will be bracing themselves for perhaps another frenzied session, given that today’s event comes after the fastest drop into bear market territory in history and record stretch of +/- 4% trading sessions in US equities. Keep in mind, that with open interest in US equities hovering at multi-year highs an unwind (or rolling off) leveraged positions can make for a volatile session, particularly to the upside.

Quadruple Witching (Futures and Options Expiries)

FTSE 100 March (1015GMT)

Euro Stoxx 50 (1100GMT)

DAX 30 (1200GMT)

E-Mini S&P 500 (1330GMT)

Nasdaq 100 (1330GMT)

Dow Jones (1330GMT)

CAC 40 (1500GMT)

US Treasuries Futures Expiry (1700GMT)

WTI Futures Expiry (1830GMT)

CAD: Equity markets have stabilised this morning, while the US Dollar has seen a modest pullback. However, we see this as a temporary pause in the dollar strength as opposed to a significant reversal. Volatility remains elevated and as long as this is the case, particularly in a recessionary environment then there will be fundamental demand for dollars. That said, the Canadian Dollar has also benefitted from a lift in oil prices after reports that Texas (Largest oil producing state in the US) could curtail oil production for the first time in decades. Although, with the spread of the coronavirus showing little signs of easing up, more and more countries will continue to go on lockdown, thus reduce demand for oil, as such, risks remain tilted to the downside for oil.Levels to Watch

Why is the US Dollar Surging?

Economic Calendar (20/03/20)

Dow Jones, S&P 500 Wary of Quadruple Witching Volatility - US Market Open

Source: DailyFX,

WHAT’S DRIVING MARKETS TODAY

  1. British Pound (GBP) Latest: GBP/USD Rebound Looks Fragile After Wild Sell-Off by Nick Cawley, Market Analyst
  2. Canadian Dollar Forecast: Key USD/CAD Levels to Watch, Significant Reversal?” by Justin McQueen, Market Analyst
  3. USD/MXN – US Dollar Skyward Move vs Mexican Peso Ends Where? by Paul Robinson, Market Analyst

--- Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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