Wall Street still in decline, awaiting the roundup of announcements that will arrive from the ECB at 13.45 Italian time and, of the press conference where the president of the Eurotower Christine Lagarde will speak, following the release of the Beige Book by the Federal Reserve.
Dow Jones Futures Fall 0.23% to 34,930; S&P 500 futures are down 0.24% to 4,501 points, while Nasdaq futures are down 0.20% to 15,588 points.
Yesterday the Dow Jones and the S&P 500 fell for the third consecutive session, while the Nasdaq fell for the first session of the last five.
The Dow Jones Industrial Average lost 68.93 points, to 35,031.07 points, while the S&P 500 fell 0.13% to 4,514.07. The Nasdaq Composite fell 0.57% to 15.286.64.
Also yesterday, the Federal Reserve of Jerome Powell published the Beige Book, the report on the economic conditions of the United States that the US central bank publishes eight times a year and the latest edition of which refers to the months of July and August.
The report found that the US economy suffered a slowdown, which caused its growth rate to weaken slightly at “a moderate pace”. The weakening is due to the effects on the economy of the spread of the Delta variant.
At the same time, with regard to US inflation, the Beige Book confirmed that American companies are facing an increase in costs, aggravated by the shortage of raw materials and production goods; in many areas, according to the Federal Reserve, businesses will likely be forced to pass the cost increase onto consumers.
The Fed’s report found that, in general, inflation “is solid at a high pace”: half of the 12 districts surveyed by the central bank indicated “strong” pressure and the other half that they spoke of pressure. ” moderate “.
Both in the euro area and in the US, the fear is of a premature tapering of the stimulus measures launched to counter the effects of the Covid-19 pandemic.
In the case of the ECB, there are fears of the tapering of the PEPP bazooka, especially in light of the latest data on inflation in the Eurozone.
According to recent research on the subject, based on statements by policy makers, the chances that a reduction in the pace of Pepp purchases will be announced at this meeting of the ECB are over 60%.
It therefore appears likely that Frankfurt will announce a reduction in the volume of purchases within the Pepp and a return to the pace previously held, before the acceleration announced in March. In any case, the ECB sees the program as an insurance against the risk of downside, so the Pepp will continue as long as the pandemic is in place.
Meanwhile, watch out for Treasuries, with 10-year rates falling to 1.327% discounting fears about US GDP growth.
It is precisely the aversion to risk that is instead bringing the buy on the dollar, with the Dollar Index at 92.712, recovering in three consecutive days of increases.
Pending news from the ECB, the euro retraces from the two-month high tested last Friday at $ 1.1909, extending losses to $ 1.1819.