News

Dollar Index Inches Higher as Treasury Yields Surge

USD

The dollar index, which measures the greenback against a basket of major currencies, held steady above 98.30 supported by lower European currencies and rising US yields. The euro and pound account for almost 70% of the dollar index basket. Both currencies are consolidating in a tight trading range awaiting further clarity on the stance of the new European Central Bank President Christine Lagarde and the upcoming UK election. On the other hand, the stronger-than-expected Chinese manufacturing PMI lifted risk sentiment, where the US 10-year yields rose to a two-week high of 1.861%, and the USDJPY climbed to a six-month high of 109.72.

Equities

Major US stock index futures edged higher despite the tension between the United States and China over Hong Kong. Market participants are worried that the different opinions over Hong Kong could negatively affect the ongoing trade talks. However, earlier today, we witnessed a solid Chinese manufacturing PMI reading, which was positive to the market sentiment. The Dow Jones Industrial Average futures rose to a fresh record high of 28195, the S&P 500 futures recovered to 3150, and NASDAQ futures tackled a new high near 8456.

Metals

Gold prices drifted lower erasing gains earned on Friday as U.S. Treasury yields advanced to a two-week high. The Chinese manufacturing data supported investors' risk appetite and weighed on safe-haven assets. The price of a gold ounce dropped to $1454, the price of silver ounce tumbled to a two-week low of $16.75, while palladium hovered near a record high of $1840.

Oil

Oil prices recovered slightly from the heavy losses incurred on Friday. Oil benchmarks dropped to a two-week low on concerns that the US-Chinese tension over Hong Kong could disrupt the ongoing trade talks. However, the Chinese factory growth pushed prices slightly higher ahead of the European trading session, where the West Texas Intermediate crude futures rose to $56.24, and Brent futures climbed to $61.55. Also, market participants are looking forward to fresh insights on the OPEC+ meeting that is taking place on the 5th and 6th of December in Vienna.

Major Economic Events

GMT Country Event Expectation Previous

9:30

UK

Manufacturing PMI (Nov)

48.3

48.3

14:00

EU

ECB President Lagarde Speaks  

 

 

15:00

US

ISM Manufacturing PMI (Nov)

49.2

48.3


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