Risk Sentiment Surges as Geopolitical Concerns Ease

Equities

Major US stock-index futures edged higher with S&P500 and Nasdaq futures hitting a fresh record high as investors woes over the latest geopolitical developments lessened. President Donald Trump stated that no Americans were harmed from Iran's missile attack lowering the chances of any retaliation. On the other hand, the Chinese Commerce Ministry confirmed that the Chinese vice Premier Liu He will head to the United States to sign the phase 1 of the trade deal between 13 and 15 of January. The Dow Jones Industrial Average futures rose to 28857, the S&P500 futures advanced to 3265, and Nasdaq futures rallied to 8986.

USD

The dollar index, which measures the greenback against a basket of major currencies, rose to a two-week high of 97.31 on upbeat economic data. After a solid ISM non-manufacturing PMI on Tuesday, the ADP Employment report showed that the private payrolls rose by 202 thousand in December, and the prior reading was revised higher to 124 thousand from 67 thousand as previously reported. Market participants are looking forward to the December jobs report to be released tomorrow. The EURUSD fell to $1.1102, the GBPUSD declined to $1.3080, and the USDJPY soared to 109.35 supported by lower geopolitical woes.

Metals

Gold prices slid into the negative territory on the week following Iran’s less-than-feared retaliation and trade deal signing headlines. The comments of President Donald Trump and the Iranian Foreign Minister Mohammad Javad Zarif signaled that both sides do not seek any further escalation. The price of a gold ounce tumbled to $1540 after trading near a seven-year high of $1610 on Wednesday morning, the price of a silver ounce declined to $17.80, and palladium faltered at a record high of $2154 and dived to $2061.

Oil

Oil prices declined to a three-week low as geopolitical concerns eased following comments from Trump and Zarif. On the other hand, the US Energy Information Administration reported a buildup of 1.164 million barrels in US crude inventories last week. The West Texas Intermediate crude futures dropped to $59.14, and Brent futures fell to $64.93.

Major Economic Events

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