ozgurdonmaz
Stock index futures point to a higher open Wednesday with some risk appetite after the broader market closed below a key level.
Nasdaq 100 futures (NDX:IND) +0.9%, S&P futures (SPX) +0.7% and Dow futures (INDU) +0.5% are higher.
The S&P closed below its 200-week moving average around 3,590 yesterday and that is often considered the dividing line between a correction and a recessionary decline.
Rates are cautious ahead of today’s producer price numbers. The 10-year Treasury yield (US10Y) is flat at 3.94% and the 2-year yield (US2Y) is down 2 basis points to 4.29%.
September PPI is out before the bell and economists expect a 0.2% rise in headline to an annual rate of 8.4%, with core PPI up 0.3%.
What “really matters here is the clear downward trend in core PPI inflation, and the potential for a steep, sustained plunge over the next year, beginning right now,” Pantheon Macro’s Ian Shepherdson said.
Also on the economic calendar, the latest Fed minutes are out this afternoon.
“Fed policy has the flavor of a playground fight – members of the FOMC clustering around the struggling figure of the economy chanting ‘raise, raise, raise,'” UBS chief economist Paul Donovan wrote. “We have, however, heard some more reasonable voices recently.”
Among active individual issues, PepsiCo is higher after boosting revenue guidance.
U.K. events are still resonating globally. The major U.S. averages sold off late yesterday after Bank of England Governor Andrew Bailey spooked markets, affirming a three-day deadline for bond purchases and for pensions funds to shore up portfolios.
After what some called an all-time central banking gaffe, the FT reported that the BoE could relent and then the BoE refuted that and reaffirmed the Oct. 14 end to gilt buying.
“The Governor confirmed this position yesterday, and it has been made absolutely clear in contact with the banks at senior levels,” a spokesman said.
In response, yields are off to the races again. The 30-year gilt yield is up more than 20 basis points, topping 5%, and the 20-year yield is at its highest level since 2008.
“The world is watching” and this could easily be similar to Italy’s debt crisis, strategist Ben Laidler said.
Image and article originally from seekingalpha.com. Read the original article here.