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Markets start the year on a solid note
S&P 500 futures are gaining ground in premarket trading as traders continue to bet on a strong economic recovery.
Today, traders had a chance to take a look at the final readings of the December Manufacturing PMI reports. In the euro zone, the manufacturing PMI increased from 53.8 in November to 55.2 in December. In China, the manufacturing PMI fell from 54.9 to 53.0. In the UK, the manufacturing PMI increased from 55.6 to 57.5. Numbers above 50 show expansion.
The United States will provide the final reading of its manufacturing PMI report after the market opens. Analysts expect the manufacturing PMI to decline from 56.7 to 56.5.
The economic rebound in the manufacturing segment remains strong despite the second wave of coronavirus, which is good for stocks.
Oil traders await signals from OPEC +
Oil has recently tried to test the $ 50 level, but failed to break above $ 49.80 and approached $ 48.50. Today, the OPEC + members will discuss the current state of the market and outline their production strategy for February.
Yesterday, OPEC Secretary General Mohammad Barkindo pointed out that the oil market faces many downside risks. If OPEC + decides to maintain the current size of production cuts in February, oil and oil-related stocks will gain additional support.
However, Russia has previously expressed interest in gradually increasing production, and it remains to be seen whether the group will resist the temptation to increase production at a time when oil prices are rising.
The US dollar tests new lows at the beginning of the year
The US dollar index, which measures the strength of the US dollar against a wide basket of currencies, has recently tested new lows at 89.42. The US dollar remains under significant pressure as traders are betting on a strong recovery and buying riskier currencies.
The falling dollar can serve as a major bullish catalyst for commodity markets, providing material support for oil, gold, silver, copper, and other commodities.
Gold has recently managed to break above the psychologically important $ 1900 level and gained strong bullish momentum, so gold miners will likely enjoy significant interest during today’s trading session.
To see all of today’s economic events, check out our economic calendar.
