Higher Open Expected For US markets: Oil, Gold Up

Higher open likely for the U.S. markets Friday after important equity gauges looked higher on Friday morning spurred by the optimism on a Fed rate cut later in July.

Around 6 a.m. ET, Dow Jones futures indicated a positive open beyond 85 points. Futures on the S&P and Nasdaq were also high.

Federal Reserve Chairman Jerome Powell stated on Thursday that the central bank might consider easing monetary policy at its next meeting.

On data, producer price index data (PPI) and Core PPI for June will be coming at 8:30 a.m. ET.

At the corporate news side, Infosys will release the latest quarterly earnings before the bell.

European stocks jumped Friday morning as investors reacted to new Chinese trade data showing a fall in China’s exports were less than expected in June.

The fall in dollar-denominated exports was 1.3 percent vis a vis the same period a year ago compared to Reuters poll that estimated a 2 percent decline.

The pan-European Stoxx 600 jumped 0.2 percent by mid-morning on the back of the ongoing trade war with the U.S.

Oil price jumps

Oil prices zoomed to a six-week high on Friday as U.S. oil producers in the Gulf of Mexico cut their output by half because of a tropical storm. Oil prices were also aided by the tensions in the Middle East where the U.K and Iran are on an oil tanker tussle.

Brent crude futures were up 0.9 percent at $67.09 per barrel by 0642 GMT. The U.S. West Texas Intermediate (WTI) crude futures were up 0.8 percent at $60.66 a barrel.

Kim Kwang, a commodity analyst at Samsung Futures in Seoul, said a sharp drop in U.S. crude stocks and geopolitical risks will keep both Brent and WTI at current levels.

A lower 2020 oil demand outlook by the OPEC will keep price gains in check. OPEC has said the demand for 2020 will be 29.27 million BPD, down from 1.34 million BPD this year.

Asian stocks up

Asian stock markets climbed up on Friday. Mainland Chinese stocks were up with the Shanghai Composite rising 0.44 percent. Hong Kong’s Hang Seng index gained 0.23 percent.

Japan’s Nikkei closed 0.2 percent higher while the Topix index was down 0.15 percent. South Korea’s Kospi was up 0.29 percent. Australia’s ASX 200 slipped 0.29 percent.

According to the latest data, China’s dollar-denominated exports fell 1.3 percent in June from a year ago while imports fell 7.3 percent in the same period. Reuters poll had expected China’s June exports to decline 2 percent from a year ago.

Gold price rises

Gold prices surged on Friday consolidating above $1,400 as renewed Sino-U.S. trade tensions and prospects of an interest rate cut by the U.S. Federal Reserve fuelled safe-haven demand.

Spot gold jumped 0.6 percent at $1,411.67 per ounce at 0728 GMT. The U.S. gold futures were up 0.3 percent to $1,411.30 an ounce.

“We have a slightly weaker U.S. dollar, tensions in the Middle East and once again, the prolonged trade dispute between the U.S. and China, which are all supportive to gold,” commented Michael McCarthy, chief market strategist, CMC Markets.

“Stronger US inflation data had an impact on expectations of a rate cut, but it hasn’t changed the direction,” said McCarthy.