Wall Street futures hold gains following inflation data … FT
Wall Street futures hold gains following inflation data
Peter Wells in New York
US stock futures are higher on Friday, suggesting the market should finish a rough week — and an at times tumultuous month — on an up note.
The escalating trade spat between the US and its allies has been a major influence over investor sentiment, with the likes of the China, EU, Canada and Mexico implementing, or at least threatening, to impose higher duties on US imports in retaliation for
the Trump administration’s plans to do similar.
From earlier in the month, markets have also been processing an expected faster pace of interest rate rises from the Federal Reserve as the US central bank tightened monetary policy, as expected, and bumped up
its economic forecasts for this year and next.
Data on Friday morning would probably do little to dissuade the Fed from that path, as its preferred measure of inflation hit its 2 per cent target in May for the first time in six years.
The figures had a limited impact on Wall Street futures, which remained higher. There had been some wobbles earlier this morning following a media report President Donald Trump wanted to withdraw from the World
Trade Organization, but Treasury Secretary Steven Mnuchin later dismissed this as wrong.
Futures for the S&P 500 and the Nasdaq 100 were up ⅓ of 1 per cent, while those for the Dow Jones Industrial Average were up 0.4 per cent higher.
As of Thursday’s close, the S&P 500 is down 1.4 per cent for the week, up 0.4 per cent for June and up 2.9 per cent for the quarter.
US government bonds were mixed in the wake of the PCE data. The yield on the benchmark 10-year US Treasury was down 0.3 basis points at 2.8437 per cent, but that on the more policy-sensitive two-year was up 0.8
bps to 2.5283 per cent. Yields fall as bond prices rise.
The dollar was softer, though, with the DXY index, measuring the greenback against a weighted basket of global peers, down 0.6 per cent at 94.812. The DXY closed at an 11-month high earlier this week.