On Wall Street, US futures are about to turn around, after the positive closing of the US stock market on the eve of the day. The Dow Jones finished the eve session up 30 points, after dropping over 200 points in intraday lows; the S&P 500 advanced 0.3%, the Nasdaq Composite rallied 0.7%.
The decidedly contained purchases followed Black Tuesday which saw the Dow Jones capitulate by nearly 1300 points and the Nasdaq and S&P 500 collapsing by more than 5% and 4% respectively. At 1.15pm Italian time, futures on the Dow Jones fall by 0.14%, those on the S&P 500 move back by 0.21%, those on the Nasdaq fall by 0.35%.
Sentiment improved slightly yesterday with the release of the US PPI Producer Price Index, which fell 0.1% on a monthly basis.
The core component of the data, excluding the prices of food, energy and commercial services, rose by 0.2%, confirming that the growth in core inflation itself is becoming more rooted in the US economy.
On an annual basis, good news came from the slowdown in the PPI index, which rose in August to the rate of 8.7%, in sharp retreat from + 9.8% in July, and the slowest pace of growth since August 2021. Core PPI inflation also turned around on an annual basis, up 5.6%, at the slowest pace since June 2021.
But the publication, the day before yesterday, of the other given that measures inflation, the one suffered by consumers, remains a specter that worries investors.
It is no coincidence that Treasury rates confirm the bullish phase, and attention is also focused on the yield curve between 2 and 30 years, never so inverted since 2000. The spread is equal to 35 basis points.
The prospect of a more aggressive Fed in the fight against inflation, poised to raise rates by as much as 100 basis points at the next and upcoming meeting on September 20-21, led to two-year Treasury rates also exceeding the threshold yesterday. by 3.8%, jumping up to 3.805%, the highest value since November 2007.
Yields on two-year bonds continue to run today, shooting up to 3.823% today, the new record since 2007. Yields on 10-year BTPs advance to 3.451%.
In an article published today, Bloomberg recalled that two-year bond yields jumped a whopping 23 basis points to 3.79% this week, while 30-year Treasury rates rose by less than 2 basis points. in the same period, to 3.46%.
The next announcement on US rates by the Fed by Jerome Powell is approaching, expected on 21 September: at this point, a tightening of 75 basis points, the third in a row, is considered inevitable. And the likelihood of a 100 basis point rate hike is growing.