Pgiam/iStock via Getty Images
Stock index futures are up slightly Monday but trading is expected to be cautious before the CPI on Tuesday and the Fed decision on Wednesday.
Nasdaq 100 futures (NDX:IND) +0.3%, S&P futures (SPX) +0.2% and Dow futures (INDU) +0.2% ticked higher.
The 10-year Treasury yield (US10Y) fell 4 basis points to 3.53% and the 2-year yield (US2Y) fell 5 basis points to 4.33%.
“The Fed, the ECB and the BoE are all expected to downshift the pace of rate hikes to 50bps this week from 75bps at their last meetings. US CPI first though,” Deutsche Bank’s Jim Reid said. “Given the very close proximity to the FOMC it clearly has the ability to change the tone of the message, the statement and the dot plots but is highly unlikely to change the headline 50bps hike.”
“In terms of more granularity around the Fed the following day, the dots will be fascinating,” Reid added. “The likely 50bps hike will add to the 375bps seen so far this year but make a step down from a run of four successive 75bps moves. Our economists think the recent Fedspeak justifies an increase in the median terminal dot to 4.9% but that there are compelling reasons for this to go to 5.1% – inline with the current DB house view for terminal. This is due to financial conditions easing of late and no obvious near term signs that the labor market is slowing.”
Among active stock, Amgen (AMGN) is reportedly close to buying Horizon Therapeutics (HZNP).
How much do you think the Fed will hike rates? Vote in our Wall Street Breakfast poll.
