U.S. futures drop with focus on further economic data

The US dollar was trading near its recent high early Tuesday after a three-week rally, with many economists awaiting further economic data. Recent strong US employment data and persistently high inflation have raised US interest rate expectations and supported the dollar’s gains this month, while Tuesday’s European and US manufacturing data and Friday’s PCE price index could provide further guidance. After a rather uneventful day due to the holiday of the US President, the dollar remained close to 132.2 against the Japanese yen and 1.0666 USD against the euro. The US dollar index has risen for three straight weeks so far in February, trading around 10 after hitting a six-week high of 10 .67 on Friday. Societe Generale strategist Kit Juckes says Friday’s failure to push lower after falling below $1.0650 sums up the currency market for me. “There are two reasons why the dollar is hitting,” he added, saying that European and American economic forecasts are converging and the gap in relative interest rate expectations is narrowing. “I suspect the strong dollar strength will boost the Fed Funds futures market, which is set for a 50 basis point (bp) rate hike in March,” he added. New Zealand’s interest rate decision on Wednesday morning is also in focus, with the NZD trading steady around 0.62 6 against the US dollar, while expectations point to a 50bp rate cut by the central bank and the economic impact of Cyclone Gabrielle. is also appreciated. “As markets factor in reconstruction costs and the likely impact on inflation, insurance flows and infrastructure spending, this is fast becoming a potential driver of continued NZD strength,” ANZ analysts said. , In the US market, major US stock futures were lower in late Monday’s session after another volatile week in which rising interest rates left many market participants wondering about the Federal Reserve’s next move. , Dow Jones Industrial Average futures were down about 111 points, while S&P 500 futures and Nasdaq 100 futures were down about 0.37% and 0.3%, respectively. US markets were closed on Monday for the Presidents’ holiday. The Dow Jones fell 0.1% from last week, extending its weekly losing streak to three, while the S&P 500 fell 0.3% for a second straight week. However, the Nasdaq Composite rose 0.6%. The market moves followed recent data on higher-than-expected inflation, raising concerns that persistently high inflation could force the Federal Reserve to keep interest rates higher for longer. Many saw the move as one that could boost the economy. to a possible recession. “We think a recession is almost inevitable, but we don’t think it will start until early to mid-202 ,” Doug Peta, U.S. investment strategist at BCA Research, said in a note. “Such a delay would give stocks a window to rally.” On Wednesday, the central bank is expected to publish the minutes of its previous meeting, which ended on February 1, where the central bank decided to raise interest rates by 25 basis points. Oil prices fell on Tuesday after a recent recovery in early declines, as market participants await monetary policy signals from the release of FOMC minutes, which are expected to highlight a dovish outlook for central banks. . , Recent comments from members of the Federal Reserve pointed to the possibility of a larger-than-expected increase in US interest rates as January inflation data showed that inflation remained high. Higher prices could affect economic growth and possibly oil demand. Brent crude futures were down about 0.9% at $83.33 a barrel, while West Texas Intermediate crude futures lost nearly 0.8% to $76.80 a barrel by 22:0 ET (03:0 GMT).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s