Here are five things you must know for Monday, October 17:
1. — Stock Futures Higher As Bond Market Volatility Eases
U.S. equity futures moved firmly higher Monday, while the dollar retreated against its global peers, as investors looked for an easing in bond market turmoil ahead ahead of another busy week for earnings releases on Wall Street.
Financial markets in Britain, which have caused global uproar of late amid plans by new Prime Minister Liz Truss to boost borrowing to pay for tax cuts, steadied Monday following the appointment of a new finance minister who promised to tear up many of her key fiscal objectives.
The move leaves Truss dangling by a political thread, but has buttressed U.K. bond markets with lower yields and a steady pound, which edged to 1.1259 against the U.S. dollar. Benchmark 10-year U.K. government bond yields were marked 27 basis points lower at 4.06%, helping U.S. 10-year notes fall to around 3.957% in overnight trading.
Market volatility is likely to remain a fixture for investors this week, however, with the Vix index, the CBOE group’s key volatility gauge, rising 1.7% overnight to 32.49 points. That move suggests daily swings of around 72 points over the next 30 days for the biggest U.S. benchmark.
Investors will also be closely tracking moves in the Fed Funds futures market, where traders are betting on a 93.4% chance of a 75 basis point rate hike from the Federal Reserve next month, following last week’s hotter-than-expected September inflation reading of 8.2%, with bets on a fifth consecutive move in December rising to 63.3%.
That said, the U.S. dollar, which tracks the greenback against a basket of its global peers and its typically seen as an indicator of broader risk appetite, was marked 0.33% lower in European trading at 112.94 each, suggesting firmer optimism on Wall Street heading into the start of trading.
Futures contracts tied to the S&P 500 are indicating a 40 point opening bell gain, while those linked to the Dow Jones Industrial Average are priced for a rally of around 305 points. The tech-focused Nasdaq is priced for…
..
