➤ Global stocks rise on 1st trading day of the year.
➤ Trump says 'phase one' US-China trade deal to be signed Jan. 15.
➤ Chinese central bank lowers reserve requirements for lenders.
➤ China said to suspend Shanghai-London stock trading link.
Wall Street is set to kick off the new year by joining global peers in a trading rally as investors held on to risk appetite on the back of trade optimism.
Futures for the S&P 500 rose 0.5% as of 6:30 a.m. ET. The benchmark index ended 2019's last session 0.3% higher, making an annual gain of 28.9%, the best since 2013.
Meanwhile, futures advanced 0.7% for the Nasdaq 100, which logged a yearly rise of nearly 38%.
The U.S. and China will sign a "phase one" trade deal Jan. 15, President Donald Trump tweeted, adding that he will later travel to Beijing to commence "phase two" negotiations.
European equities traded higher, with Germany's DAX rising 0.8%, France's CAC 40 advancing 1.1% and the FTSE 100 gaining 0.9%. The wider Stoxx Europe 600 climbed 1%, with notable gains from banks and a 2.8% rise in shares of Airbus SE amid reports that it has beaten Boeing Co. as the world's largest plane maker in terms of jet deliveries in 2019.
In Asia, Hong Kong's Hang Seng index ended up 1.3% to log its best close since July 2019, while the Shanghai SE Composite climbed 1.2% and Japanese markets remained closed. News emerged that China has suspended the Shanghai-London Stock Connect, a scheme that allows cross-border listings between the two cities, over political tensions with the U.K.
In currencies, sterling slid 0.5% against the dollar, while the euro dropped 0.2% against the U.S. currency as data showed the eurozone's manufacturing sector remained in contraction territory for the 11th straight month in December 2019. The wider bloc's ability to "avoid sliding into a downturn" would be challenging in 2020, given the persistent decline in manufacturing activity, commented Chris Williamson, chief business economist at IHS Markit.
The Chinese yuan was little changed a day after the People's Bank of China started the year by lowering lenders' reserve requirement ratios by 50 basis points, effective Jan. 6. The Japanese yen was virtually flat against the dollar.
Meanwhile, the Thai baht briefly recorded its biggest decline since 2007, slumping 1.8% against the dollar to 30.23 before erasing losses to trade at 30.16, amid speculation of a possible currency intervention by the Bank of Thailand, which has expressed concerns about the baht's appreciation.
In the bond market, the 10-year Treasury yield lost 1 basis point to 1.92%. The yield on German bunds with the same maturity held steady at negative 0.19%.
In commodities, Brent crude rose 0.5% to $66.31 per barrel on the ICE Futures Exchange. Gold was nearly flat at $1,523.80 per ounce.
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The day ahead:
8:30 a.m. ET – U.S. jobless claims (Econoday consensus: 222,000)
9:45 a.m. ET – U.S. manufacturing Purchasing Managers' Index (Econoday consensus: 52.5)
4:30 p.m. ET – U.S. Fed balance sheet and money supply