It’s a pivotal week for US equity futures, with Nvidia earnings, delayed US economic reports, and Fed speakers under the spotlight.
Japanese Economy Contracts, Challenging BoJ Rate Hike Bets
Amid fading expectations of a December Fed rate cut, Japanese GDP figures could further delay a Bank of Japan rate hike. The Japanese economy contracted 0.4% quarter-on-quarter (QoQ) in the third quarter after expanding 0.6% in the second quarter.
The third-quarter economic contraction, fading bets on a BoJ rate hike, and a weaker Japanese yen may fuel carry trades, boosting demand for US stock futures. Notably, USD/JPY rose 0.08% to 154.646 in morning trading, hovering near last week’s nine-month high of 155.044.
Furthermore, the third-quarter contraction supported Prime Minister Takaichi’s fiscal stimulus plans and ultra-loose monetary policy stance, headwinds for the yen.
US Stock Futures: Economic Data and the Fed in Focus
Futures steadied during the Asian session after last week’s heightened volatility. The Dow Jones E-mini rose 12 points, the Nasdaq 100 E-mini gained 146 points, while the S&P 500 E-mini climbed 22 points.
Later on Monday, US economic data and Fed speakers will take center stage. Traders should closely monitor Fed speeches that could further sink bets on a December rate cut. US stock futures may come under intense selling pressure if Fed speakers close the door on further monetary policy easing.