News

Stock Futures Weighed Down, Talks to Save the Day?

Equities

Major US stock index futures ended a choppy trading session in the red territory as the trade clash between China and the United States intensified. On the weekend, President Trump sparked the concerns over a full-blown trade war between the world's largest two economies. He also fueled these concerns yesterday by stating that China broke the deal in their ongoing trade talks. However, the Chinese trade delegation including the Vice Premier will be arriving in Washington to save what is left of the deal and ensure that trade disputes should be solved by negotiations. During the Asian session, the Dow Jones Industrial Average futures dropped to a low of 25824, the S&P500 futures declined to 2868, and Nasdaq futures tumbled to 7570.

USD

The dollar index which measures the greenback against a basket of major currencies settled flat for the third consecutive day at 97.42 as investors’ awaited fresh fundamental developments. The looming tension between China and the United States affected investor's sentiment and their positioning in the market. Positive progress in the expected trade talks could empower investors to jump into riskier assets again. On the other hand, market participants await the opening remarks of the Federal Reserve chairman Jerome Powell at the Federal Reserve System Community Development Research Conference, in addition to the April Producer Price Index and March Trade Balance. The US 10-year yields drifted lower to 2.454%, the USDJPY tumbled to a three-month low of 109.65, and the EURUSD hovered near $1.12.

Metals

The price of a gold ounce retreated from a four-week high of $1292 to trade lower at $1280 as stock indices recovered. However, the gold ounce recovered losses as US stock indices resumed the downside rally during the Asian session. The yellow metal is well-known as a safe haven during high market risks and uncertainties. Meanwhile, the silver ounce traded near $14.82, and Palladium plunged to $1298, the lowest since early January.

Oil

Oil prices surged on a buildup in US weekly crude inventories. The US Energy Information Administration reported that the weekly US crude oil inventories dropped by 3.963 million barrels last week. The West Texas Intermediate crude futures rose to a high of $62.34, and Brent futures edged higher towards $70.68. However, the looming trade tensions between China and the United States is weighing on investors sentiment as a heavy clash would lead to a deterioration in the global economic outlook and affect the demand for oil.

Major Economic Events

GMT Country Event Expectation Previous

12:30

US

Fed Chair Powell Speaks  

 

 

12:30

US

PPI (MoM) (Apr)

0.2%

0.6%

12:30

US

Initial Jobless Claims

215

230

12:30

US

Trade Balance (Mar)

-50.20

-49.40

 

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