NEW YORK, N.Y. – US equity futures are leaning towards an optimistic trading session as it edges higher following the optimistic day for most stocks in the Asian market.
US futures nudged higher during the holiday-thinned session on Thursday as many major markets stayed close. The modest gains early in the day followed as market players look towards January 2020 and the previous optimism regarding the breakthrough on the trade negotiations between two of the largest economies in the world. On the other hand, the US dollar is slowly on the downtrend for the day.
With the European markets remained closed after the Christmas holiday, futures contracts on the three major indexes in the US stock market leans toward a more positive open as the trading resumes on Thursday. Stock markets are still shuttered in Sydney and Hong Kong, while shares in Seoul, Shanghai, and Tokyo advanced for the day. The US dollar slipped on Thursday against other major currencies, and the ten-year treasury yields were trading mostly flat ahead of the jobless claims numbers in the US scheduled to be published later in the day. In Asia, the Japanese yen also weakened during the session.
The worldwide stocks index MSCI ACWI is also heading towards an optimistic 8% increase for the last quarter of 2019, a performance for the last three months of the year that has only dipped a handful of times in the past ten years.
Most of the focus of market players at the moment remains on the opening of the first month of 2020 and the developments on the US-China trade negotiations. Previous reports regarding trade stated that the signing of phase one of the trade agreement could be expected in January 2020.
The chief Asia market strategist at Axitrader, Stephen Innes, stated that the balance-sheet expansion of the central bank this year is giving a flood of liquidity. Combining this cash influx with the possibility of an economic bounce after the tariffs are reverses, it has become a driving force for market players to own more risk assets.
Meanwhile, the overnight repo rate in China dropped to its lowest level yet since 2009, following the central bank’s latest liquidity injections.
Elsewhere in the market, the British pound tracked modest increase, which signals that the losses from last week until Monday were sustained amid the increasing concerns regarding a hard Brexit.
Meanwhile, market players are on the lookout for some key events this week. The US jobless claims report is scheduled later on Thursday, followed by the industrial production and retail sales of Japan set for Friday.