Futures Edge Higher, Weak Data Weighs On EU, RBA Cuts Rates To Record Low

The U.S. Futures Are Edging Higher

The U.S. futures are inching higher on Tuesday as trade hopes prop up expectations for future growth. While no deal is expected, the U.S. and China are planning to hold trade talks next week. Both sides are believed to need and want a deal, the questions are how long it will take to reach one and what it will look like when it is.  Along with this, traders are waiting on a ruling from the WTO that will open the door for U.S. tariffs on EU goods. The WTO is expected to rule that EU subsidies to aircraft manufacturers are unfair and hurt U.S. businesses.

The Dow Jones Industrial Average is up 0.28% in early trading while the NASDAQ and S&P 500 are up 0.23% and 0.18% respectively. In economic news, traders are waiting on manufacturing PMI and construction spending due out later today. Later this week focus will be on the labor data including ADP on Wednesday and NFP on Friday. Also on tap, today are a number of Fed speeches including one from James Bullard.

EU Markets Falter On Weak PMI Data

The EU markets are edging lower in early Tuesday trading after a round of weak PMI data from the region. The CAC, DAX, and FTSE are all down about -0.12% at midday. Official EU manufacturing PMI shows the bloc’s activity continues to contract. The final read came in at 45.7, a tenth better than the flash reading but still a seven-year low. Germany led the contraction with a PMI reading of 41.7.

In political news, UK PM Boris Johnson continues to defend his plan for a new Brexit deal among growing criticism. Johnson is speaking before a conference of his ruling Conservative party this week. In stock news, plumbing giant Fergusson saw its shares surge more than 3.4% after it reported better than expected results.

Asia Moves Higher, China Closed For Holiday

Asia-Pacific stocks moved higher after the RBA cut its rate to a record low. The RBA cut interest rates by 25 bps to 0.75% and levels never before seen in the Land Down Under. According to remarks made by RBA officials after the release, we can expect rates to remain low for an extended period of time. There is also a chance for future cuts to even lower levels. The ASX led Tuesday’s gains with an advance of 0.81% while the Nikkei and Kospi both rose about 0.45%. Mainland Chinese and Hong Kong markets are closed today for the 70th anniversary of the foundation of the People’s Republic of China celebrations.