US PMIs grow by most in three years
The US S&P combined PMI surged to 56.6 in December from 54.9 in the previous reading, a 33-month high.
US services PMI rose to 58.5 in December from November’s 56.1, beating estimates of 55.7.
Finally, the US manufacturing PMI dipped to 48.3 in December from 49.7 in November, below estimates of 49.4.
Wall Street climbs with eyes fixed on Fed
US stock indices rose on Monday as markets await the Federal Reserve’s policy meeting this week.
Tomorrow, the Fed will commence its two-day policy meeting, widely expected to end with a 0.25% interest rate cut.
According to the Fedwatch tool, the odds of a 0.25% Fed rate cut this week stood at a near full 97%.
On trading, Dow Jones rose 0.1%, or 10 points as of 16:02 GMT to 43,839 points, while S&P 500 rose 0.4%, or 22 points to 6074 points, as NASDAQ added 0.8%, or 157 points to 20085 points.
Brent gives up two-week high on grim Chinese data
International benchmark Brent fell in American trade on Monday away from two-week highs on active profit-taking, and following grim Chinese data on personal consumption.
The losses are stymied by statements by US Treasury Secretary Janet Yellen about imposing additional sanctions on “dark fleet” oil carriers.
Prices
Brent fell 0.8% to $73.74 a barrel, with a session-high at $0.74.45.
Brent closed up 1.3% on Friday, the fourth profit in five days, hitting a two-week high at $74.55.
Brent surged 5.25% last week, the first profit in three days as US crude stocks fell, and the outlook of additional US sanctions on Russian crude.
Grim Chinese Data
China’s industrial production accelerated in November, but retail sales were far weaker than expected, raising the pressure on Beijing to boost the economy with even more stimulus measures.
Retail sales are a major marker of consumer spending in the country, which represents over half the total GDP in China.
US Sanctions
US Treasury Secretary Janet Yellen told Reuters on Friday the US is considering additional sanctions on dark fleet oil carriers, and might target Chinese banks in a bid to control Russia’s oil income.
The new US sanctions on entities that trade in Iranian oil already boosted the prices of the crude to multi-year highs, with the Trump administration expected to impose even more pressure on Iran.
US dollar backs off two-week high before important US data
The US dollar fell in European trade on Monday against a basket of major rivals away from two-week highs on active profit-taking, while US 10-year treasury yields stalled.
The developments came before crucial US manufacturing and services data later today, which could provide important clues on the strength of the US economy.
The Index
The dollar index fell 0.2% to 106.76, with a session-high at 106.98.
On Friday, the index lost 0.1%, the first loss in six days away from a two-week high at 107.19.
The index rose 0.9% last week, the second weekly profit in a row.
US Yields
US 10-year treasury yields fell 0.6% away from three-week highs at 4.407% on active profit-taking.
US Rates
According to the Fedwatch tool, the odds of a 0.25% interest rate cut by the Federal Reserve next week stood at 97%.
Now investors await a batch of important US services and manufacturing data later today to gather more clues on the flexibility of the US economy.
Fed’s Meeting
The Federal Reserve will hold its periodic policy meeting this week, and is fully expected to cut interest rates by 25 basis points.