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Futures subdued after strong week on Wall Street

March 07, 2023 00:00:00

US stock index futures were subdued on Monday as investors awaited Federal Reserve Chair Jerome Powell's testimony and monthly payrolls report this week for cues on the central bank's interest-rate trajectory, reports Reuters.

The three main US stock indexes rallied on Friday and notched weekly gains as Treasury yields pulled back from their peaks after comments from Fed policymakers calmed jitters over aggressive rate hikes.

The yield on US 10-year Treasury notes slipped to 3.93 per cent, its lowest since March 1, while the two-year yield inched down to 4.84 per cent after touching its highest since 2007 last week.

Powell will be testifying before Congress on Tuesday and Wednesday and investors will watch for clues on the policy outlook, after recent strong economic data and hot inflation numbers fueled bets for more interest rate hikes this year.

"Looking at the latest set of data, the U-turn of easing inflation and last month's blowout jobs figures, we don't expect to hear anything less than hawkish from Mr. Powell," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"But it's always possible that a word like 'disinflation' slips out of his mouth, and that we get a boost on risk."

Traders expect at least three 25-basis-point rate hikes this year and see rates peaking at 5.44 per cent by September from 4.67 per cent now.

At 05:29 a.m. ET, Dow e-minis were down 31 points, or 0.09 per cent, S&P 500 e-minis were down 1.75 points, or 0.04 per cent, while Nasdaq 100 e-minis were up 5.25 points, or 0.04 per cent.

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