Wall Street futures moved slightly higher on Thursday, as the dollar pushed back recent gains against its global counterparts as investors watched a policy decision from the European Central and a policy speech from Fed Chair Jerome Powell.
Shares hope to build on yesterday’s brisk rally on Wall Street, which broke the longest daily losing streak for the Nasdaq since 2016, amid a dip in the dollar and betting on a so-called ‘soft landing’ for the US economy .
Markets can get further clues in that direction from President Powell’s speech later this morning in Washington, which begins as ECB President Christine Lagarde will address the media in Frankfurt after a fully expected 75 basis point rate hike.
Powell will participate in a question-and-answer session led by Cato Institute CEO Peter Goettler at 9:10 a.m. Eastern Time as investors look for clues about the size of the Fed’s expected rate hike on Sept. 21 and the policy path. from the central bank between now and the end of the year.
The CME Group’s FedWatch is charging an 82% chance of a 75 basis point rate hike, third in a row, as investors look for a so-called “terminal” Fed Funds rate north of 4% before Powell breaks a pause signals in monetary tightening.
Faced with a looming recession linked in part to Russia’s war against Ukraine and the escalating energy crisis in the region, as well as record high inflation, the ECB is expected to raise its key refinancing rate by 75 basis points to 1. 25%.
However, the aggressive tone expected from both was marginally offset by comments from Reserve Bank of Australia governor Philip Lowe, who argued for “a slower pace of interest rate hikes gets stronger as cash interest rates rise” after a move earlier this week to raise the country’s key lending rate to its seven-year high of 3.25%
The dollar index, which tracks the greenback against a basket of six global currencies, was 0.37% lower at 109.428 during the session, while two-year Treasury yields fell to 3.423%.
The softer dollar put upward pressure on oil prices, with the ongoing energy deadlock between the European Union, which has proposed price caps for Russian oil exports, and Vladimir Putin providing further support.
WTI crude futures for October delivery were marked 67 cents higher at $82.61 a barrel during the session, while Brent contacts for November, the global benchmark, contributed 45 cents to trade at $88.45 a barrel. .
On Wall Street, futures contracts pegged to the S&P 500 indicate a modest drop in the opening bell of 2 points, which pegged to the Dow Jones Industrial Average is priced at a gain of 25 points. Futures linked to the tech-focused Nasdaq point to a 10-point decline.
In overseas markets, the European Stoxx 600 benchmark rose 0.15% during afternoon trading in Frankfurt ahead of the ECB’s interest rate decision, while the region-wide MSCI ex-Japan index lifted last night’s rally on Wall Street by 0.31 % from yesterday’s seven-month rate. lows.
Tesla (TSLA) stocks were generally active, rising 0.3% after taking a big jump in China’s sales and exports last month as automaker Shanghai gigafactory returned to full throttle following shutdowns due to Covid restrictions and a planned upgrade.
GameStop (GME) shares rose 6.5% after the video game retailer unveiled a new partnership with crypto exchange group FTX that offset a sixth straight quarterly loss.