US Stocks Rally on Hopes of US-China Trade Deal, Powell's Speech in Focus

US Stocks Rally on Hopes of US-China Trade Deal, Powell's Speech in Focus


US equity futures settled higher for the second consecutive day, supported by investors' optimism ahead of the G20 summit. Trump's top economic advisor, Larry Kudlow, said that the White House was having "a lot of communication with the Chinese government at all levels." Moreover, he added that Trump believes there is a good possibility to reach a trade deal with China. The Dow Jones Industrial Average futures added 1.1% to 24773, the S&P500 futures rose 1% to 2686, and the Nasdaq futures gained 1.2% to 6717. Since early this year, the stock markets had been vulnerable to headlines concerning the trade disputes between the United States and its rivals. Trump and Xi will discuss trade issues in the G20 summit later this week. A positive outcome would help to recede a heavy cloud of uncertainties and spark risk sentiment.


The dollar index finished higher for the third consecutive day, boosted by the expectations of an interest rate hike by the Federal Reserve in December and the safe haven demand amid growing uncertainty from Europe. DXY rose 0.3% to 97.37, the highest daily close in two weeks. The Federal Reserve Chairman Jerome Powell will deliver a speech at the Economic Club of New York where market participants will be searching for hints about the interest rate path. Yesterday, President Donald Trump reaffirmed that he is unhappy with the performance of Jerome Powell and the Fed's monetary policy stance. Trump has been continuously criticizing the Fed, but his comments failed to affect the Fed's actions.


Gold prices fell sharply as the dollar appreciated along with US stocks. The gold ounce lost 0.6% to $1214, the lowest close in ten days, while the silver ounce extended its daily losing streak to four after dropping 0.6% to $14.12. 


Oil prices closed higher for the second consecutive day, lifted by supply eruption in the North Sea and expectations of OPEC production cut. The production at the Buzzard oilfield stopped due to maintenance. Also, market participants expect OPEC to reduce supply by more than 1 million barrels per day on its December meeting. The West Texas Intermediate crude futures gained 1% to $52.08, and the Brent futures added 0.4% to $60.81. The American Petroleum Institute reported that the US weekly crude oil stock rose by 3.453 million barrels last week. The Energy Information Administration will report the official numbers later today.

Major Economic Events

GMT Country Event Expectation Previous
13:30 US GDP (QoQ) (Q3) 3.6% 3.5%
15:00 US New Home Sales (Oct) 583 553
15:30 US Crude Oil Inventories 0.769 4.851
16:30 UK BoE Financial Stability Report    
17:00 US Fed Chair Powell Speaks    


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