US Stock Futures Slip as China Halts Some US Farm Imports

US Stock Futures Slip as China Halts Some US Farm Imports


Major US stock index futures moved lower following reports that China is considering halting some US farm imports. Bloomberg reported that Chinese government officials ordered major state-run agricultural firms to pause purchases of US farm goods as China is evaluating the recent developments with the United States. The tensions between China and the United States rose significantly post the coronavirus outbreak and recently over Hong Kong. The Dow Jones Industrial Average futures declined to 25248, the S&P500 futures dropped to 3024, and Nasdaq futures 9496.


The dollar index, which measures the greenback against a basket of major currencies, bounced off a multi-month low of 97.86 to trade at 98.08 lifted by demand for safety. The headlines revealing that China will halt US farm imports affected the market immediately, as market participants continue to monitor the escalating tensions between the two countries. If China is seriously considering cutting US farm imports, Trump could retaliate by abandoning the trade agreement. The tensions between China and the United States will continue to be a key mover to financial markets. The risk-sensitive AUDUSD crashed to $0.6719 after trading near a four-month high of $0.6772 this morning on optimism over Chinese economic data, the EURUSD eased to $1.1116, and the USDJPY declined to 107.38.


Gold prices edged higher as the riots in the United States intensified uncertainty and raised demand for safety. On the other hand, the escalating tensions between the world's largest economies, and the Covid19 remain key boosters for safe-asset demand. The price of a gold ounce rose to $1745, the price of a silver ounce soared to $18.40, and palladium recovered to 1986.


Oil prices continued to trade near a multi-month high awaiting fresh fundamental drivers. Market participants are looking forward to the coming OPEC+ meeting and its outcome regarding the current output cuts. The West Texas Intermediate crude July contract rose to $35.65, and Brent Blend August delivery rallied to $37.99.

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