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US Stock Futures Fall on Growth Concerns, Dollar Inches Higher

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Equities

Major US stock futures resumed trading with a gap lower amid concerns over growth. The recent developments in the US bond market signals that a slowdown could be ahead. The 2-year yields surpassed the 5-year yields for the first time since 2007, and the difference between the 2-year yields and the 10-years yields narrowed to the lowest since 2007. Moreover, the lingering trade tensions between China and the United States are affecting investors' risk sentiment. The Dow Jones Industrial Average futures fell to a low of 24562, the S&P500 futures tested a low of 2651, and the Nasdaq futures tumbled to a low of 6641.

USD

The dollar index which measures the strength of the greenback against a basket of major currencies is trading slightly higher above 97.15 level. The current market conditions are providing support for safe currencies such as dollar, yen, and Swiss franc against other riskier currencies. Yesterday, the Beige book revealed that most of the twelve Federal Reserve districts had moderate growth and a tight labor market. However, it also showed that the prices are being affected by the trade tariffs, and the demand in the housing market slowed down. Market participants await the ADP employment report today along with the ISM non-manufacturing PMI.

CAD

The Canadian Dollar fell sharply against other major currencies following the Bank of Canada interest rate decision. The bank left interest rates unchanged at 1.75%. However, the bank said that the data of the fourth quarter would likely show a less economic momentum, and the policy will depend on oil markets developments and economic data. The USDCAD rose 0.7% to 1.3352, the highest close since June 2017, and the EURCAD climbed 0.7% to 1.5148.

Metals

Gold prices remain caught in a narrow range near a five-month high. The gold ounce hit resistance near the $1242 level and found support near the $1232 level. Meanwhile, the price of Palladium surpassed the price of the gold ounce and traded at a high of $1262. The silver ounce is trading slightly lower at $14.37.

Oil

Oil prices remain steady ahead of the OPEC meeting that starts today. OPEC+ are expected to agree on a production cut to support prices that declined more than 30% since October. The West Texas Intermediate futures held steady near the $53 level, and Brent futures traded flat at $61.70. In addition to the OPEC meeting, market participants await the release of the US crude oil inventories by the Energy Information Administration later today.

Major Economic Events

GMT Country Event Expectation Previous
13:15 US ADP Nonfarm Employment Change (Nov) 196 227
13:30 US Initial Jobless Claims 226 234
13:35 CA BoC Gov Poloz Speaks     
15:00 US ISM Non-Manufacturing PMI (Nov) 59.2 60.3
15:00 CA Ivey PMI (Nov) 60.3 61.8
16:00 US Crude Oil Inventories -0.942 3.577

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