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Stock index futures point to a mixed open after a choppy previous session.
S&P (SPX), Nasdaq 100 (NDX:IND) and Dow (INDU) futures are little changed.
The 10-year Treasury yield continues its march towards 2%, up 3 basis points to 1.95%, topping the closing high of December 2019.
“Even if we’re a long way from crisis territory, the coming months will be fascinating in terms of just how far central banks are able to go when it comes to tackling inflation, and investors are getting more confident that we’re set to see plenty of hikes from global central banks over the coming months,” Deutsche Bank’s Jim Reid wrote. “Indeed, even if the Fed hikes in line with what futures are pricing (5 hikes in 2022) and doesn’t move to go faster, 125bps worth of hikes in a calendar year would still be the most we’ve seen since 2005, so a completely different playbook to the last cycle.”
Higher rates are helping the Financials sectors, which is the best performer in premarket trading. Energy is the biggest decliner as WTI crude drops back below $90 per barrel.
“The US and Germany seem to be disagreeing on whether the Nord Stream 2 pipeline would be affected in the event of a conflict in Ukraine (this is not necessarily a surprise),” UBS’ Paul Donovan said. “French President Macron met with Russian President Putin, with French officials talking about Russian de-escalation. President Putin is not yet talking about de-escalation.”
Among active stocks, Peloton is tumbling as its CEO steps down.