US Stock Futures Recover on China-US Trade Talks

US Stock Futures Recover on China-US Trade Talks


Major US indices bounced off a one-week low during the Asian session following the news that China and the US will hold vice-minister level trade talks on the 7th and 8th of January. The Dow Jones Industrial Average futures rose 0.7% to 22870, the S&P500 futures climbed 0.7% to 2470, and the Nasdaq futures added 1.2% to 6243.  Lately, the global stock market was under pressure on signs of a global economic slowdown which curbed investors' risk appetite.


The dollar index which measures the greenback against a basket of major currencies lost 0.5% to 96.23 on soft economic data. The December ISM manufacturing PMI dropped to 54.1 from 59.3 previous, the lowest in three years and the sharpest one-month drop since 2009. The soft economic data signals that the Fed will be forced to pause its monetary policy tightening cycle. The US 10-year yields fell to 2.541%, the lowest since mid-January 2018. Market participants await today's jobs report, mainly, the average earnings.


Metals prices edged higher as the dollar weakened along with treasury yields. The gold ounce rose to $1298, the highest in more than six months. Meanwhile, the silver ounce finished higher for the seventh consecutive day at $15.70, and palladium traded above $1270.


Oil prices surged on expectations that the OPEC+ cut agreement could lead to a stable market, and the trade talks between China and the United States would lead to a deal that will boost the global economy. The West Texas Intermediate crude futures traded near a two-week high of $47.75, and the Brent futures rose to a high of $56.66. Market participants await the crude oil inventories release later today.

Major Economic Events

GMT Country Event Expectation Previous
8:55 EU German Unemployment Change (Dec) -12 -16
9:30 UK Services PMI (Dec) 50.7 50.4
10:00 EU CPI (YoY) (Dec)  1.8% 1.9%
13:30 US Nonfarm Payrolls (Dec) 178 155
13:30 US Unemployment Rate (Dec) 3.7% 3.7%
13:30 CA Employment Change (Dec) 6.8 94.1
13:30 CA Unemployment Rate (Dec) 5.7% 5.6%
15:15 US Fed Chair Powell Speaks    
15:30 US Crude Oil Inventories -3.086 -0.046
18:00 US U.S. Baker Hughes Oil Rig Count   885


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