US Stock Futures:

• Trading around the flatline on Friday
• Followed a loss the day before after Chair Powell adopted a more hawkish tone
• Powell stated that the Fed is prepared to raise interest rates further if necessary
• Easing some bets of a rate cut next year
• Awaiting additional comments from other Fed officials throughout the day

Market Dynamics:

• Monitoring key economic reports scheduled for next week, including the CPI report, for further insights into the interest rate outlook
• Earnings season continues, with Diageo losing about 14% in premarket trading after warning of weaker profit and sales
• Trade Desk sank about 25% after offering weak sales guidance
• Weekly performance: S&P 500 down nearly 0.3%, Dow Jones fell 0.5%, Nasdaq up 0.3% so far

Currency and Interest Rates:

• Dollar index held above 105.5, set to finish the week higher
• Federal Reserve officials push back against speculations of already peaked US interest rates
• Powell: Fed “not confident” it has done enough to bring down inflation
• Fed Governor Michelle Bowman and Minneapolis Fed President Neel Kashkari also signal potential for further rate hikes
• Weekly jobless claims fell by 3K to 217K, in line with expectations

US Treasury Yield:

• Yield on US 10-year Treasury note steadied around 4.6% on Friday
• Powell’s remarks on potential further tightening if needed
• Fed’s recent decision to keep interest rates unchanged and investors’ close monitoring of new auctions
• Treasury Department sold $24 billion in 30-year bonds, bid-to-cover ratio lowest in almost two years
• Upcoming US CPI report expected to provide crucial updates on inflationary pressures

E-mini S&P 500 Perspective

The E-mini S&P 500 is currently trading with gains of about 0.1% around 4366. In the previous session, it closed with a double distribution volume structure. The specific low volume area could potentially be filled or act as a selling area, while the lower region might be targeted for absorption purposes. Additionally, the market formed an outside bar, indicating a possible shift in market dynamics towards balance.

The current situation, with a slightly lower dollar and negative volatility, may provide some support to the market at this time.

(Click on image to enlarge)

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