(Bloomberg) — US futures rose Thursday as data painted a mixed picture of the economy in the anxious wait for a key speech by Federal Reserve Chair Jerome Powell. Treasury yields ticked higher and a dollar gauge dipped.
(Bloomberg) — US futures rose Thursday as data painted a mixed picture of the economy in the anxious wait for a key speech by Federal Reserve Chair Jerome Powell.
Treasury yields ticked higher and a dollar gauge dipped.
Contracts on the S&P 500 and Nasdaq 100 advanced in the wake of positive closes for both gauges. The government’s main measures of US growth pointed in different directions in the first half of 2022, data showed Thursday, underpinning further debate on the health of the economy.
Sentiment was boosted earlier after China stepped up stimulus with a further 1 trillion yuan ($146 billion) of measures.
Traders expect markets to remain volatile as they look to Powell’s comments due Friday at the Jackson Hole meeting for clues on the pace of US monetary tightening.
Kansas City Fed President Esther George joined the chorus of hawkish policy makers in the run-up to Jackson Hole, telling Bloomberg TV the central bank’s benchmark may have to rise above 4% to defeat inflation.
The message has eroded a bounce in stocks and bonds from mid-June troughs. The tension in markets is whether those assets will continue to head back toward the lows of the year.
“Powell is likely to push back on premature expectations of a dovish pivot, reiterating the focus on the fight against high inflation,” said Silvia Dall’Angelo, a senior economist at Federated Hermes Ltd.
“Whether markets take him seriously amid an increasingly gloomy outlook for the global economy is yet to be seen.”
Europe’s stock benchmark pared an advance amid mixed economic data from the region’s biggest economy.
Energy and basic resources stocks were the biggest gainers, with retailers underperforming. Sovereign bonds across Europe gained.
Germany’s economy proved more resilient than initially thought in the second quarter, though worsening business confidence pointed to a still-cloudy outlook.
The euro area has already entered a “shallow” recession that’s been triggered by surging energy prices and will last through year-end, according to economists at UBS Group AG.
Crude oil held around $95 a barrel, with elevated energy prices feeding into renewed jitters about whether price pressures have peaked.
Natural gas has surged to fresh highs, intensifying an energy crisis that threatens the euro-area economy and hence the global outlook.
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What to watch this week:
- Kansas City Fed hosts its annual economic policy symposium in Jackson Hole, Wyoming, Thursday
- ECB’s July minutes, Thursday
- Fed Chair Powell speaks at Jackson Hole, Friday
- US personal income, PCE deflator, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 0.5% as of 8:37 a.m.
New York time
- Futures on the Nasdaq 100 rose 0.6%
- Futures on the Dow Jones Industrial Average rose 0.2%
- The Stoxx Europe 600 rose 0.2%
- The MSCI World index rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro was little changed at $0.9966
- The British pound rose 0.1% to $1.1814
- The Japanese yen rose 0.2% to 136.81 per dollar
Bonds
- The yield on 10-year Treasuries advanced two basis points to 3.12%
- Germany’s 10-year yield declined one basis point to 1.36%
- Britain’s 10-year yield declined five basis points to 2.65%
Commodities
- West Texas Intermediate crude was little changed
- Gold futures rose 0.7% to $1,773.60 an ounce
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