E-mini S&P 500 Futures (September): Settled at 4236.25, up 22.50
E-mini Nasdaq-100 Futures (September): Settled at 14,258.25, up 128.25
U.S. benchmarks have continued their rebound from last week’s healthy pullback. After a quiet overnight session, the S&P is staring down the barrel at its 4258.25 all-time high, only 0.25% away. However, the Nasdaq has already set a fresh record for the second straight session.
Federal Reserve committee members have brought a sense of calm over markets the last 2 days and the U.S. Dollar has weakened, in turn lifting risk assets. NY Fed President John Williams spoke on Bloomberg yesterday morning and reiterated the patient policy stance stated on Monday, stating, “data has not progressed enough to warrant a shift.”
He also reminded viewers of the committee’s maneuver to Symmetrical Inflation Targeting last year, which ultimately buys added patience on inflation.
San Francisco Fed President Mary Daly said, “the Fed’s policy should remain steady.” Although she pointed to a potential tapering of MBS purchases late this year, she emphasized the importance of the data through autumn.
Rounding out the day was Fed Chair Jerome Powell’s Congressional testimony. He, too, emphasized the bank’s patience in removing policy support and further soothed markets by saying he still expects the recent jump in inflation to be transitory. Adding to that, he believes that “it’s very, very unlikely to be a repeat of 1970’s style inflation.”
This all plays well into our Jekyll and Hyde narrative, where the Federal Reserve was more hawkish last week in order to probe the market’s resolve, they’ll now appear more dovish. This morning, Atlanta Fed President Raphael Bostic was noted in saying, “the Fed should avoid prematurely declaring a win in the jobs battle.” Today, we looked to Fed Governor Michelle Bowman for direction at 8:10 a.m. CT.
In terms of data, we looked to Flash PMIs at 8:45 a.m. CT. Those from Europe this morning were stronger than expected, helping to weaken the U.S. Dollar. Atlanta Fed President Bostic is on the schedule again, speaking at 10:00 a.m. CT and will be followed by ECB President Lagarde at 11:00 a.m. CT. There’s a 5-Year auction at noon CT.
Last, we look to a speech from Boston Fed President Eric Rosengren at 3:30 p.m. CT. He’s a 2022 voter and viewed as more hawkish.
Blue Line Futures’ Bill Baruch will be joining the TD Ameritrade Network today to discuss markets at 1:30 p.m. CT.
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