Wall Street opens the week in positive territory, after gaining on a weekly basis, for the first time in three consecutive weeks of declines. Last week the Dow Jones gained 2.66%, the S&P 500 was up 3.65% and the Nasdaq Composite jumped 4.14%.
At about 4 pm Italian time, the futures on the Dow Jones rose by about 200 points (+ 0.68%); the Nasdaq advanced 0.80%, as did the S&P 500.
An important market mover this week is the publication of the data that monitors the trend in inflation in the United States, or the US consumer price index, which will be published tomorrow and will affect the Federal’s choice of rates. Reserve by Jerome Powell.
According to CME Group’s FedWatch metric, markets are betting on another rate hike of 75 points in the September meeting – which will culminate in the announcement on 21 September – with a probability of 90% higher than the probability of 82% priced last week.
The probability of a 50 basis point squeeze is just 10%.
Watch out for the speech made by Federal Reserve Chairman Jerome Powell last week.
Powell said the central bank is “heavily engaged” in controlling inflation.
“We need to act now, openly, as forcefully as we have done,” Powell said speaking at the Cato Institute’s monetary policy conference in Washington. “History strongly warns against premature easing of politics – were Powell’s words -. I can assure you that my colleagues and I are strongly committed to this project and will continue it until the work is finished ”.
In the last few hours, news has come of further restrictions on chip exports to China that the US Commerce Department intends to impose on semiconductor giants.
The restrictions are aimed at exports of components for making chips to those Chinese factories that produce advanced semiconductors, according to the news agency Reuters.
The US department would have sent ad hoc letters to the American semiconductor giants KLA, Lam Research and Applied Materials already at the beginning of the year.
On the forex market, a buy day on the euro, after the hawkish statements arrived last week by Christine Lagarde from the ECB.
The euro jumped more than 1% today, heading towards the $ 1.02 threshold, before reducing gains to + 0.66%, currently at $ 1.0108.
Confirming the most hawkish approach of the European Central Bank – which last week raised rates by 75 basis points, in what was the strongest monetary squeeze since the birth of the euro – was the number one in the last few hours. of the Bundesbank, German central bank, Joachim Nagel.
In a speech to a German radio station, Nagel said that if the picture of the consumer price index does not change (+ 9.1% inflation in August in the euro area), “further clear moves will have to follow” by the ECB.
The Reuters news agency also reported what it learned from some anonymous sources, according to which Christine Lagarde’s ECB could be forced to bring Eurozone rates “into restrictive territory”.
Meanwhile, economist and Wharton professor Jeremy Siegel commented in a speech on CNBC’s “Squawk Box” that he believed that Wall Street could surprise on the upside, thanks to the weakness of the US dollar.
“The fact that the ECB is more aggressive means that the dollar can go down. And it’s really going down. And this is very, very important, in terms of (companies’) profits to be repatriated from abroad, ”explained Jeremy Siegel. Today, the Dollar Index is thus turning around, settling at around 108.21.