US Stock Futures Rise on Trade Deal Optimism

Equities

Major US stock index futures extended gains on optimism over a trade deal that could put an end to the sixteen-month-old trade clashes. The United States and China indicated on Friday progress in their talks. Moreover, on the weekend, the US Commerce Secretary Wilbur Ross stated that US companies will be granted licenses to sell to "Huawei" very shortly, which fueled investors' risk appetite. The Dow Jones Industrial Average futures climbed to a three-month high of 27368, the S&P500 futures advanced to an all-time high of 3072, and Nasdaq futures rallied to a record high of 8204.

USD

The dollar index, which measures the greenback against a basket of major currencies, recovered slightly to 94.34 after testing a two-month low of 97.11 post economic data release on Friday. The US October jobs reports revealed that the US economy created 128000 vacancies while the unemployment rate ticked higher to 3.6% as the participation rate rose by 0.1% to 63.3%. Moreover, the Average Hourly Earnings grew by only 0.2%, missing estimates of 0.3%. Generally, the jobs report was slightly positive, but the sentiment was knocked by the ISM Manufacturing PMI, which continued to prove the contraction of the manufacturing sector. Market participants will look closely into the economic data releases and trade developments to assess the implications on the Fed's interest rate path. The US 10-year yields currently sit at 1.75%, the USDJPY rose to 108.40, and the EURUSD drifted slightly lower to $1.1149.

Metals

Gold prices edged higher supported by soft US ISM Manufacturing PMI, but trade optimism capped gains. The weak economic data will increase the chances of further interest rate cuts in the future while sealing a trade deal would lower the probability of further easing. The price of a gold ounce is hovering around $1510, the price of a silver ounce is holding above $18.00, while palladium is tackling a new record high near $1820.

Oil

Oil prices inched higher on trade optimism. The United States and China are communicating to the public that they are making progress in their trade talks. If the world's largest economies can strike a trade deal to put an end to their trade disputes, the global economic outlook will receive a boost, and lift oil demand. The West Texas Intermediate crude futures rose to a one-week high of $56.35, and Brent futures rallied to $61.78.

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