US Futures Extend Upside Rally on Enhanced Risk Appetite

Equities

Major US stock-index futures extended upside rally during early trading hours of the week supported by optimism over treatment that could put an end to the impact of Covid19. Yesterday, the Food and Drug Administration approved the plasma treatment for hospitalized cases. Also, the Trump administration is pushing forward to approve the vaccine developed by AstraZeneca and Oxford. Ahead of the anticipated US Presidential elections, Trump administration will do whatever it takes to diminish the risk of Covid19 on the US economy, and ensure a fast recovery. On the other hand, the better-than-expected economic data lifted investors' risk appetite. The Dow Jones Industrial Average futures rose to a two-week high of 28048, the S&P500 futures rallied to another record high of 3413, and Nasdaq posted a fresh all-time high of 11650.

Dollar

The dollar index, which measures the greenback against a basket of major currencies, eased slightly to 93.09 after a sharp surge on Friday on upbeat data. The Markit Manufacturing and Services PMI came well above expectations, signaling that the economic activity recovery is on the right track, and could be faster than that of rivals. Also, the Existing Home Sales rose significantly to 5.86 million. Market participants will look forward to the Jackson Hole symposium later this week, to know how Central Bankers are assessing the current situations.

Metals

Precious metals prices are trading in a consolidation zone, awaiting clearer drivers. The price of a gold ounce is trading between a support zone of $1910 and a resistance zone of $1955. The price of a silver ounce held steady slightly below $27, and palladium futures were almost flat near $2180.

Oil

Oil prices kicked off the week on a stronger note as US storms forced producers to cut production. Oil producers in the Gulf of Mexico reduced more than half of their production ahead of Hurricane Marco and Tropical Storm Laura. On Friday, the U.S. Baker Hughes reported the first significant rise in US oil rig count since March. The West Texas Intermediate crude October delivery advanced to 42.63, and Brent blend October delivery rallied to $44.66.

Major Economic Events

Disclaimer

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.