- U.S. futures leap on reports of October trade talks
- Dollar drops with Treasurys ahead of U.S. jobs report
- Pound keeps climbing as lawmakers reject no-deal Brexit, snap elections
- U.S. equities near top of bearish pattern
Key Events
Futures on the S&P 500, Dow and NASDAQ 100 built on U.S. gains to leap higher this morning as China signaled an October round of trade negotiations with the U.S..
The news also lifted Europe's STOXX 600 higher, with all major national indices in positive territory
In the earlier Asian session, most regional benchmarks climbed. Japan’s Nikkei 225 (+2.29%) outperformed, hitting a monthly high with the help of the Pulp & Paper, Railway & Bus and Real Estate sectors.
Technically, the jump is merely an upward correction withing a descending channel since February, as bears and bulls struggle over the long-term uptrend line since 2012, guarded by the 200 WMA. According to this chart analysis, the current rally is only in the short-term, while the long-term trend is to the downside.
Global Financial Affairs
Yesterday, U.S. equities snapped out of losses as easing geopolitical risk helped investors resume the global uptrend. Technically, both the Dow Jones Industrial Average and the S&P 500 neared the top of their—presumed—bearish patterns.
In FX trading, the dollar fell alongside Treasurys for the second straight day this morning as investors awaited key labor data, coming out on Friday, to gauge upcoming interest rates moves. Some analysts argued that optimistic data published yesterday on the Beige Book may lend Fed hawks some support in the next monetary policy meeting. The greenback slipped below the short-term uptrend line, suggesting a downward correction to the bottom of its rising channel since June.
On the other side of the Atlantic, the pound gained ground for a third consecutive session as British MPs at the lower house endorsed a bill to halt a no-deal Brexit, while rejecting Prime Minister Boris Johnson's plans for a snap election. Technically, cable crossed above a falling channel since early May, protected by the 50 DMA. An advance above the Aug. 27, 1.2309 high would increase the odds of an upward reversal, pending a second higher trough to establish an ascending peak-trough trend.
In commodities markets, oil prices continued to suffer from a lack of direction amid trade uncertainties. OPEC oil producers are slated to meet in Abu Dhabi next week to monitor the efficacy of ongoing supply cuts. From a technical standpoint, WTI prices could be setting up for an advance, bouncing off the bottom of an hourly falling flag, bearish after the $3, or 7.5% drop between Tuesday And Wednesday.
Up Ahead
- Fed Chair Jerome Powell is scheduled to speak at the University of Zurich on Friday.
- The U.S. jobs report, out on Friday, is projected to show the widely-watched nonfarm payrolls rose by 158,000 in August, versus 164,000 the month prior. Estimates are for unemployment to be steady at 3.7% and the average hourly earnings rate of increase to slow to 3.0%.
Market Moves
Stocks
- The U.K.’s FTSE 100 Index rose 0.2%.
- The MSCI Asia Pacific Index jumped 1%.
- The MSCI Emerging Market Index gained 0.8%.
Currencies
- The Dollar Index fell 0.1% for the second day and a total loss of 0.66%
- The euro slid 0.1% to $1.1023.
- The British pound declined 0.3% to $1.2221.
- The Japanese yen slipped 0.1% to 106.47 per dollar.
Bonds
- The yield on 10-year Treasurys gained three basis points to 1.50%.
- Germany’s 10-year yield climbed one basis point to -0.66%.
- Britain’s 10-year yield increased two basis points to 0.514%.
- Italy’s 10-year yield rose less than one basis point to 0.811%.
Commodities