"Risk-On" Sentiment Prevails on Trade Talks Progress


Major US stock-index futures extended gains to post fresh record high supported by the ongoing trade optimism between China and the United States.  On the weekend, the US treasury secretary Steve Mnuchin and trade representative Robert Lighthizer held "constructive discussions" with China's Vice Premier Liu He, aiming to reach a trade deal that would put an end to their trade disputes. During the Asian session, the Dow Jones Industrial Average futures rose to a high of 28059, the S&P futures climbed to a high of 3127, and NASDAQ futures advanced to 8323.


The dollar index, which measures the greenback against a basket of major currencies, tumbled to a ten-day low of 97.87, as investors favored riskier assets. The ongoing trade optimism between China and the United States heightened investors' risk sentiment, which supported riskier currencies on the back of safe-haven currencies. The US dollar was weaker than the euro, pound, and commodity currencies but stronger than the Japanese Yen and the Swiss franc. Moreover, the US 10-Year yields edged higher to 1.85%, and the CME Fed Watch tool ruled out any interest rate cuts in a year.


Gold prices edged down as risk-on sentiment prevailed. The trade talks between China and the United States succeeded in boosting investors' positive expectations on the economy, ensured the flow towards riskier assets. The price of a gold ounce declined to $1458, the price of a silver ounce tumbled to $16.80, and palladium drifted lower to $1710.


Oil prices rallied to a seven-week high supported by the prevailing risk sentiment. Investors are expecting that the trade talks between the World's largest economies would put an end to the ongoing trade war and boost the global economic outlook. The West Texas Intermediate crude futures rose to $58.04, and the Brent futures advanced to $63.62. On the other hand, market participants are looking forward to the outcome of the OPEC+ meeting that will take place in early December.

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