No word from China over trade talks, but hopes running high
US index futures are eyeing further modest gains ahead of Wednesday’s open, with optimism over China-US trade talks outweighing President Trump’s latest sabre rattling over the Mexican border issue. Economic data remains thin on the ground in the hours ahead, although last night’s higher than expected US consumer borrowing figures did illustrate that higher interest rates aren’t overtly hampering demand for credit.
Two Federal Reserve board members are due to speak during the day ahead and we also have the pre-Christmas FOMC meeting minutes scheduled for release, too. Expect all this to be under close scrutiny, given the divergent opinions over the outlook for US monetary policy in the year ahead. In the last few days we’ve seen calls from the Fed now holding fire on rate hikes for the whole of 2019 through to the idea that at least two quarter point increases will be seen. Any clarity here will therefore have the potential to provide some meaningful direction for stocks.
There’s also speculation that we could soon see details of the trade talks between China and the US emerging. These discussions were extended into a third day and although optimism is running high, detail is so far lacking. Any progress would likely be applauded by US stocks, whilst the accompanying risk-on demand would have the potential to weaken the greenback, adding further upside to dollar denominated assets.
Ahead of the open we’re calling the DOW up 73 at 23860 and the S&P up 8 at 2582.
Author
James Hughes
AxiTrader UK
James Hughes is Chief Market Analyst at AxiTrader. With over 15 years’ experience in the trading industry his knowledge of the financial markets and retail trading is second to none.
