(Monday market open) It may be Columbus Day, but it’s not a day off for markets or for the Federal Reserve.
As people may be tired of the Fed speakers, they are the focus today as the first Q3 earnings week begins. And with geopolitical matters appearing to be getting more complicated and key inflation data expected later in the week, things could get volatile.
Fed Vice Chair Lael Brainard will address the National Association for Business Economics meeting in Chicago today at 1:35 p.m. ET. Your theme? A sensitive one. The speech is entitled “Restoring Price Stability in an Uncertain Economic Environment”. Last week there was a parade of Fed speakers, all reading from the same hawkish hymnbook. It would be surprising not to hear the same from Brainard.
Chicago Fed President Charles Evans is also scheduled to speak today.
Stock futures had no direction overnight, trading near the flatline as the opening bell neared. The overnight action wasn’t all that unusual. The dollar strengthened.
Potential market movers
Further escalation in Ukraine over the weekend could affect markets in general and the commodities space in particular, grains in particular. Reports of rising COVID-19 cases in China could also weigh on stocks exposed to the region.
The Treasury market is closed on Columbus Day, but interest rates rose overnight in Europe and Japan after US interest rates spiked late last week. The benchmark 10-year Treasury yield (TNX) closed the old week at just under 3.9%, up from lows below 3.6% earlier last week.
That Cboe Volatility Index®(VIX) was on the rise this morning, climbing above 32 to its highest level in a while. Resistance for VIX could be mid 30s. A move through this level would take the VIX close to its May highs and likely be seen as a bearish signal.
The CME FedWatch tool earlier in the week showed a 78.2% probability of a 75 basis point rate hike at the end of the next Federal Open Market Committee meeting…
