After the heavy losses in the previous week, the US stock exchanges are looking for further losses at the start of the new week. The futures on the S&P 500 fell 0.8 percent premarket. The expectation of further interest rate hikes by the central banks and the associated concern that the economy will slip into recession continue to cause great uncertainty and risk aversion on the stock market. US Federal Reserve Chairman Jerome Powell has repeatedly emphasized that tackling persistently high inflation is the Fed’s top priority, even at the expense of economic growth. And similar things have long been heard from other central banks.
The risk of a hard landing for economies after a period of monetary tightening is increasing, said Richard Hunter, head of markets at Interactive Investor.
After the third rate hike Up 75 basis points from the previous week, speeches by US Federal Reserve members later in the day will draw attention. On the economic side, the agenda is clear, only the Chicago Fed National Activity Index for August is published before the start of trading.
On the foreign exchange market, the dollar continues to be sought after as a safe currency haven and against the background of rising US market interest rates. The dollar index rose 0.4 percent. The euro fell to a new record low since its physical inception in 2002 early Monday in response to Italy’s post-election swing to the right. In the low it cost 0.9551 dollars, but has recovered significantly from this to 0.9644 dollars most recently.
Sterling also saw a brief sharp pullback this morning and has largely recovered from that as well. The weakness of the pound continues to be due to concerns about the British government’s new financial policy, which envisages far-reaching tax cuts and a cap on energy prices, with the result that debt will rise sharply. According to analysts at the Bank of England, this also makes it more difficult to tackle inflation.
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(END) Dow Jones Newswires
September 26, 2022 06:28 ET (10:28 GMT)