Traders waiting to hear remarks from Federal Reserve Chief Jerome Powell today
financialexpress.comUS stock futures rose and Treasuries fell after a deal was reached on the weekend to avoid an American government shutdown. Traders are waiting to hear remarks from Federal Reserve Chief Jerome Powell later Monday.
Futures on the S&P 500 jumped as much as 0.7% in early Asia trade after US lawmakers Saturday passed compromise legislation to keep the government running until Nov. 17. Asia’s stock benchmark erased earlier gains, while European equity futures edged lower. A number of Asian markets, including China, were shut for holidays.
“Financial markets were bracing for a shutdown, so there’s an element of relief, but it’s only a temporary lifting of one of the clouds hanging over the markets now,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management. “Interest rates and Fed hawkishness remain the name of the game and the main driver of the markets over the next few weeks.”
Powell will take part in a roundtable discussion in Pennsylvania, along with Philadelphia Fed President Patrick Harker. US manufacturing activity and jobs data will also be in the spotlight this week after the head of the New York Fed said Friday policymakers should leave interest rates high for some time.
Treasuries dropped after the US government shutdown was averted, returning their focus to the path ahead for interest rates. US 10-year yields rose four basis points to 4.61%, while their five-year peers climbed by a similar amount to 4.64%. The dollar strengthened versus all its Group-of-10 peers.
“The higher-for-longer rates, the tighter fiscal policy going forward, the higher bond yields, at least in the short term, will all come to roost and impact the economy and cause a slowdown,” and a US recession probably in the first half of
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