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Futures Trade Lower As Traders Digest Queen’s Death

Futures Trade Lower As Traders Digest Queen’s Death

U.S. and European futures are trading quietly as investors digest the sad news of Queen’s death in the U.K. and contemplate Federal Reserve Chair Jerome Powell’s most recent statements on inflation.

Futures show Dow Jones Industrial Average gaining 50 points. As for the S&P 500 and Nasdaq 100, future contracts also indicate a higher open.

With these rises, the three main averages are on track to end their three-week losing run. By Thursday’s close, the Dow had gained 1.45 per cent. The S&P 500 has gained 2.09%, while the Nasdaq Composite has gained 1.99%.

In the commodity market, the precious metal is trading higher while the dollar index shows some retracement from its recent level. Investors anticipate further interest rate hikes from U.S. Federal Reserve Chair Jerome Powell as he reaffirmed the Fed’s hawkish stance yesterday.

Queen’s Death

After Queen Elizabeth II’s passing at age 96, the United Kingdom officially entered a period of national mourning. The longest reigning monarch of her nation died in comfort at Balmoral Castle. Earlier this year, she reached the milestone of 70 years on the throne, a reign that has seen 15 prime ministers, the death of Princess Diana, and the United Kingdom’s exit from the European Union. Her eldest son, Charles III, became the oldest person to ascend to the throne of the United Kingdom at the age of 73.

Today, we should have more information on the funeral that will be held at the national level. Parliamentary activities will likely be put on hold during the time of mourning so that members of parliament may offer condolences to the new king and pay respect to her.

ECB

After the European Central Bank raised interest rates by 75 basis points, the euro appreciated against the dollar. As the dollar and benchmark Treasury rates fell, Asian stocks rose along with those of the United States and Europe. The pound edged higher, as did oil. The price of bitcoin surpassed $20,000.

Looking at the ECB’s comments yesterday, it seems that the European Central Bank (ECB) is prepared to raise interest rates by an additional 75 basis points (bps) the next month if it is determined that such a move is necessary. Both hawks and doves on the Governing Council seem to be on board with this idea. At the non-policy meeting on October 5 in Cyprus, participants are likely to debate strategies for reducing the over €5 trillion in bonds the bank has amassed as a result of previous crises.

More massive rate increases from the Fed?

About four of five swap traders expect the Fed to raise rates by 75 basis points this month. No one is resisting the expected 75 basis point increase in the Fed funds rate this month, not even the former “doves” on the Fed’s policymaking board. In a recent interview, central bank governor Charles Evans remarked, “The Fed may very well do 75.”

China

Inflation among Chinese consumers surprisingly decreased in August as random lockdowns dampened spending. The slower-than-expected producer price rise also gives policymakers greater opportunity to stimulate the economy if necessary. The annual increase in the CPI slowed to 2.5% from 2.7% in July. The 2.3% increase in factory-gate prices seen in August was below the 3.2% forecast.

Discussions about fuel.

Today, E.U. energy ministers will explore an urgent intervention in power markets to relieve the increasing pressure. Even though Vladimir Putin called it “another foolishness,” officials are considering a plan to put a ceiling on the cost of Russian gas imports. People who are acquainted with the matter have said that the United States of America intends to prevent a possible oil price increase in the month of December, maybe by carrying out an extra release from emergency crude stockpiles.