US Stock Futures Extend Upside Rally; Dollar Holds Steady

US Stock Futures Extend Upside Rally; Dollar Holds Steady


Major US stock-index futures edged higher during early trading to expand this week's robust rally. The optimism over reopening the economy boosted investors' risk appetite and drove risky assets higher. However, market participants will continue to monitor the developments between China and the United States, especially after the Chinese legislature voted to pass the national security law for Hong Kong. On the other hand, a series of economic figures will be published today and tomorrow, which would give us further insight into the effect of COVID19 on the US economy. The Dow Jones Industrial Average futures soared to 25790, the highest since the 6th of March, the S&P500 futures edged higher to 3052, and Nasdaq futures hovered above 9400.


The dollar index, which measures the greenback against a basket of major currencies, held steady near 99 awaiting fresh fundamental drivers. The renewed tensions between China and the United States over Hong Kong kept safety assets in bid. On the other hand, the optimism over the reopening of businesses around the world enhanced risk sentiment. The EURUSD held steady near $1.10, the GBPUSD declined to $1.2260, and the risk-sensitive AUDUSD eased to $0.6588.


Gold prices rebounded from a two-week low as investors rushed to safety to brace for the next round of tensions between China and the United States after China passed the national security law for Hong Kong. On the other hand, the increased prospects of a second-round of fiscal stimulus supported the rebound. The price of a gold ounce soared to $1721 after dropping as low as $1694, the price of a silver ounce hovered above $17.30, and palladium futures held steady near $2000.


Oil prices declined as private data suggested a rise in stockpiles. The American Petroleum Institute reported a massive buildup of 8.7 million barrels last week, raising concerns over the health recovery of demand levels. On the other hand, investors are also assessing Russia's commitments to OPEC+ cuts following reports stating that Russia may not agree on extending cuts in the June meeting. The West Texas Intermediate July delivery fell to $31.13, and Brent Blend July delivery tumbled to $33.60. Market participants will be looking forward to the official inventory report published by the US Energy Information Administration later today.

Major Economic Events

GMT Country Event Expectation Previous
9:00 EZ  Consumer Confidence (May) -18.8 -18.8
12:00 EZ  German CPI (MoM) (May)   -0.1% 0.4%
12:30 US  GDP (QoQ) (Q1)  -4.8% -4.8%
12:30 US  GDP Price Index (QoQ) (Q1)  1.3% 1.4%
12:30 US  Durable Goods Orders (MoM) (Apr) -18.5% -15.3%
12:30 US  Initial Jobless Claims 2.100 2.438
14:00 US  Pending Home Sales (MoM) (Apr) -15.0% -20.8%
15:00 US  Crude Oil Inventories - -4.983


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