News

US Dollar and Stock Futures Advance on Optimism over US-China trade talks

Equities

Wall Street finished higher for the third consecutive day following reports that the Trump administration was considering to ease trade tariffs on Chinese imports. The recent trade developments managed to improve investors’ risk appetite and lift the stock market. The Dow Jones Industrial Average futures traded at a one-month high of 24480, the S&P500 futures climbed to a high of 2643, and the Nasdaq futures jumped to a high of 6760.

USD

The dollar index which measures the greenback against a basket of major currencies rose to a two-week high of 96.26 on US-China trade optimism. Market participants believe that if China and the United States manage to strike a trade deal, this could boost the US economy and diminish the woes over a global economic slowdown. Therefore, the Fed could be able to continue tightening its monetary policy through 2019 and raise interest rates further. The USDJPY and the USDCHF rose to a three-week high of 109.46 and 0.9954 respectively.

Metals

The price of a gold ounce has been trading in a tight range between $1277 and $1298 since the beginning of the year as market participants await fresh drivers to increase their appetite towards the precious metal. The silver held steady near $15.50, while palladium continued to hover at a record high of $1437.

Oil

Oil prices hovered near a one-month high supported by OPEC+ output cut, and US-China trade hopes. OPEC+ agreed in December to reduce output starting in January 2019 to boost oil prices and reach a stable market. So far the adopted strategy is doing well, as oil prices rose more than 15%. Moreover, market participants believe that a trade deal could boost the global economy and increase the demand for oil in 2019. The West Texas Intermediate crude futures traded at a high of $52.83, and Brent futures rose to $61.97. The energy services firm Baker Hughes will report the US oil rig count later today.

Major Economic Events

GMT Country Event Expectation Previous
9:30 UK Core Retail Sales (MoM) (Dec) 3.9% 3.8%
9:30 UK Retail Sales (MoM) (Dec) -0.8% 1.4%
13:30 CA Core CPI (MoM) (Dec)   -0.2%
13:30 CA CPI (MoM) (Dec) -0.4% -0.4%
18:00 US U.S. Baker Hughes Oil Rig Count   873

 

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