News

US Stock Futures Rise as US-China Trade Negotiators Plan to Speak

Equities

Major US stock-index futures earned a lift higher following the news that US-China trade negotiators are planning a call next week to follow up on the progress of the phase 1 trade deal. The tensions between the two countries are mounting as the Trump administration continued to accuse China over the Covid19 outbreak. President Trump threatened to impose additional tariffs as a response for the Covid19 outbreak and to end the trade deal if China fails to buy US products. However, at the current state, the plans of a phone call eased investors’ woes and lifted risk sentiment. Market participants will continue to monitor the matter closely. The Dow Jones Industrial Average futures rose to 23830, the S&P500 futures rallied to 2874, and Nasdaq futures advanced to 9083.

USD

The dollar index, which measures the greenback against a basket of major currencies, settled higher for the second consecutive day at 100.17, as investors favored safer currencies. The buck gained on the back of falling European currencies which account for around 70% of the dollar index basket. The questions of the German Highest Court over the European Central Bank Asset purchases program and tensions between rich and poor European countries raised the chances for a possible crisis. However, the risk sentiment gained support on reports that US-China trade negotiators are planning a call next week. As a result, investors rushed towards riskier currencies, where the AUDUSD rose to $0.6473, and the EURUSD advanced to $1.0815.

GBP

The Bank of England kept monetary policy unchanged. Interest rates remained at a low of 0.1%, and the asset purchases program total remained at £645 billion, but two members voted to increase quantitative easing. The new governor Andrew Bailey stated that he expects the recovery to happen over time and be much faster than from the global financial crisis. The GBPUSD rose to $1.2418 after testing a two-week low of $1.2310 during the Asian session, and the GBPJPY inched higher to 132.01.

Gold

Gold prices finished lower as the dollar gained along with US Treasury yields. The price of a gold ounce fell to $1685, the price of a silver ounce continued to trade near $15, while palladium bounced off the lows to $1796.

Oil

Oil prices retreated from a two-week high as sluggish economic figures raised investors' concerns. The economic indicators are showing the vast impact of the Coronavirus on the global economy and suggesting that it will take some good time for the economic activity to get back to normal. On the other hand, the US Energy Information Administration reported a buildup of 4.590 million barrels last week, the lowest reading since March. The West Texas Intermediate crude June delivery rose to $24.44, and Brent blend July delivery rallied to $30.07.

Major Economic Events

GMT Country Event Expectation Previous

12:30

US

 Initial Jobless Claims

3.000

3.839

12:30

US

 Nonfarm Productivity (QoQ) (Q1) 

-5.5%

1.2%

14:00

CA

 Ivey PMI (Apr)

41.0

26.0

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