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Thursday's Market Minute: Global Futures Lower Into the U.S. Cash Open

The move lower in equity index futures comes in reaction to comments from central bankers. It seems investors and traders are expressing worries about inflation and growth. So is Federal Reserve Chair Jerome Powell, who spoke on Wednesday at a European Central Bank forum in Sintra, Portugal.

The move lower in equity index futures comes in reaction to comments from central bankers. It seems investors and traders are expressing worries about inflation and growth. So is Federal Reserve Chair Jerome Powell, who spoke on Wednesday at a European Central Bank forum in Sintra, Portugal.

Powell said the goal is to raise rates to combat inflation without sending the economy into a recession, and while he thinks the Federal Open Market Committee can achieve that goal, the pathway to success has narrowed recently. Christine Lagarde, the ECB president, raised concerns about energy prices and the role they’ve had on inflation; earlier this month, she suggested the European Central Bank was prepared to turn the corner and take rates from negative to positive starting at the July meeting. Yields here in the U.S. for the 10-year are hovering just under 3.1%.

The S&P 500 is headed into the end of the second quarter having had posted the worst first half of the year since the 1970s; it’s down almost 20% year-to-date. Another good indicator to watch in terms of investors’ unease, the U.S. Dollar remains at levels not seen since the end of 2002.

The dollar is often seen as a safety play during times of uncertainty. The strong U.S. Dollar is also a reflection of the Fed’s hawkish tone and how up until recently the ECB has been slow to act. With crude oil (/CL) headed into the second half of the year holding up around 110, you can see where much of that unease stems from.

Today, keep in mind with month-end and quarter-end activity we often see increased volatility and wild intraday price swings, so stay on your toes and trade accordingly.

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