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Opening Bell: U.S. Futures Fall As China Toughens Its Stance Ahead Of Trade Talks

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewOct 07, 2019 06:01AM ET
www.investing.com/analysis/opening-bell-us-futures-fall-as-china-toughens-its-stance-ahead-of-trade-talks-200471025
Opening Bell: U.S. Futures Fall As China Toughens Its Stance Ahead Of Trade Talks
By Investing.com (Pinchas Cohen/Investing.com) ??|??Oct 07, 2019 06:01AM ET
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  • U.S. futures slide on signals of harder trade negotiations stance from China
  • Treasury yields, U.S. dollar gain ground
  • Pound slips on EU-U.K. Brexit deal deadlock
  • Oil rebounds
  • Key Events

    Futures on the S&P 500, Dow and NASDAQ 100 dropped this morning on news that Chinese officials may resist a broad-based trade agreement with the U.S., as they reportedly narrowed the range of items they’re willing to negotiate in this week’s meetings in Washington.

    European shares on the STOXX 600 managed to cling onto an advance, with most sectors posting gains.

    In the earlier Asian session, Hong Kong’s Hang Seng was—maybe luckily—closed for a holiday, after losing 1.11% on Friday in the wake of violent protests after the government enforced a ban on face masks. Australia’s S&P/ASX 200 (+0.71%) outperformed on thin volumes, riding the coattails of Friday’s Wall Street performance.

    Global Financial Affairs

    In Friday’s U.S. session, equities climbed for the second day on stimulus speculation, with the tech sector in the lead.

    However, on a weekly basis, stocks sealed the third consecutive decline on trade, domestic political instability and a string of negative economic headlines—where a nonfarm payroll data miss added to underwhelming manufacturing and non-manufacturing numbers.

    Yields on 10-year Treasurys extended a rebound, retesting Sunday’s low—the lowest since Sept. 4. The Dollar Index climbed with yields, also retaining its ascent and ending a four-day decline.

    Traders were buying the dollar and selling the pound amid growing pessimism on the likelihood of an orderly Brexit on Oct. 31.

    GBP/USD Daily Chart
    GBP/USD Daily Chart

    Technically, Sterling fell back toward the bottom of a rising channel. However, according the RSI, it is likely to continue below the expected support.

    WTI Daily Chart
    WTI Daily Chart

    Oil rebounded for the second day following its biggest weekly decline since July. Technically, it found support by the lows since July.

    Bitcoin crawled back above $8,000 after an early slide, warding off the risk of closing at the lowest level since June.

    Overall, investors can’t seem to catch their breaths, as prospects of a solid U.S.-China trade deal wobble, failing to provide markets some much-needed stability amid Trump’s impeachment probe and the latest signs the world’s largest economy might join in a global slowdown.

    Up Ahead

    • Chinese Vice Premier Liu He visits Washington for high-level trade talks with U.S. counterparts on Thursday and Friday, while deputy-level meetings begin as soon as today.
    • On Tuesday, Fed Chair Jerome Powell closes NABE’s annual conference in Denver
    • Minutes on the last policy meeting of the Fed’s rate-setting committee are released on Wednesday.
    • U.S. releases September inflation data on Thursday.

    Market Moves

    Stocks

  • The MSCI Asia Pacific Index gained 0.1%.
  • Currencies

  • The Dollar Index climbed 0.1%.
  • The pound weakened 0.1% to 89.158 pence per euro.
  • The euro fell 0.1% versus the dollar.
  • The Japanese yen was little changed at 106.90 per dollar.
  • The offshore yuan slipped 0.2% to 7.1284 per dollar.
  • Bonds

  • The yield on 10-year Treasurys fell less than one basis point to 1.53%.
  • Ireland’s 10-year yield dropped one basis point to -0.037%.
  • Germany’s 10-year yield slid one basis point to -0.59%.
  • Commodities

  • West Texas Intermediate crude rose 0.4% to $53.03 a barrel.
  • LME aluminum rose 0.4% to $1,726.50 per metric ton.
  • LME copper climbed 0.5% to $5,668.50 per metric ton.
  • Opening Bell: U.S. Futures Fall As China Toughens Its Stance Ahead Of Trade Talks
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    Opening Bell: U.S. Futures Fall As China Toughens Its Stance Ahead Of Trade Talks

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    Comments
    Brad Smith
    Brad Smith 11 hours ago
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    Pinchas, thanks for the updates. Oil rebounded but I'm skeptical on how long this rebound will last. I suppose we will see soon enough.
    Nick Burns
    Nick Burns 23 hours ago
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    going to be interesting to see where we go from here looks like resistance level but market isn't open yet
    SN Kumar
    SN Kumar 23 hours ago
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    indices are at their resistances. we need to see one more drop
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