Investing.com - Here are the top five things you need to know in financial markets on Wednesday, October 10:
1. Wall Street Points to Modestly Lower Open
U.S. stock index futures pointed to a slightly lower open, as investors monitored the latest moves in the bond market.
At 5:40AM ET, the blue-chip Dow futures were down 25 points, or about 0.1%, the S&P 500 futures shed 2 points, or around 0.1%, while the tech-heavy Nasdaq 100 futures indicated a decline of 15 points, or roughly 0.2%.
Stocks fell Tuesday after a choppy session, with the S&P 500 closing lower for the fourth straight day, as investors grappled with rising U.S. interest rates.
Elsewhere, in Europe, the region's major bourses were lower, as investors digested the latest developments in the stand-off between Rome and Brussels over Italy's spending plans.
Earlier, Asian markets ended mixed. In China, the mainland's benchmark Shanghai Composite inched up 0.2% in choppy trade.
2. Dollar, Treasury Yields Renew Push Higher
Away from equities, the dollar resumed its rally, as U.S. Treasury yields moved back towards their recent seven-year highs.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.1% at 95.47, not far from a seven-week high of 95.84 reached in the previous session.
Yields on the benchmark 10-year Treasury bond rose by 2.3 basis points to 3.23%, after reaching a seven-year top of 3.261% a day earlier.
Treasury yields have surged recently following a batch of upbeat economic data that bolstered the case for the Federal Reserve to raise rates in December and beyond.
3. PPI Data Ahead
Today's calendar will bring investors the September data on producer prices at 8:30AM ET (1230GMT), which should give clearer signs on the pace of inflation and fresh hints on the frequency of Federal Reserve rate hikes through the end of the year and beyond.
Producer prices are expected to have risen 0.2% last month and 2.8% over the prior year, according to estimates.
Excluding the cost of food and fuel, core producer price inflation is projected to climb 2.5% on a year-over-year basis.
On the central bank front, a pair of speeches are scheduled to take place.
Chicago Fed President Charles Evans will be in Michigan at the Flint & Genesee Chamber of Commerce luncheon; while in Georgia, Atlanta Fed President Raphael Bostic is set to make an appearance at a National Association of Corporate Directors event in Atlanta.
The Fed raised interest rates late last month, its third rate hike this year, and is expected to follow that up with another increase before the end of December, taking the benchmark fed funds rate to 2.25-2.50%.
4. Oil Traders Monitor Hurricane Michael
Michael has strengthened into an "extremely dangerous" Category 4 hurricane on the five-step Saffir-Simpson scale, according to the latest advisory from the U.S. National Hurricane Center.
Michael was packing maximum sustained winds of 130 miles an hour (210 kph), with higher gusts.
Some additional strengthening is possible before Michael makes landfall in Florida's Panhandle or Big Bend area later in the day, the center said.
Some of the storm's most significant early impact was to offshore energy production. U.S. producers in the Gulf cut oil production by about 40% on Tuesday, the Bureau of Safety and Environmental Enforcement said, as they evacuated personnel from 75 platforms in the region.
U.S. West Texas Intermediate WTI crude futures were 10 cents higher at $75.06 a barrel.
5. Britain, EU Closer to Brexit Deal
The pound inched up on reports that negotiators have moved within sight of a deal on terms of Britain’s divorce from the European Union ahead of a critical summit of EU leaders next week.
The report, citing unidentified diplomats, said Britain and the EU had narrowed their differences around the Irish border but some issues have not been resolved.
If a Brexit pact is reached, the two sides would still need to agree on a blueprint for future trade and security ties.
The U.K. and European parliaments would then need to ratify a deal before the scheduled split on March 29.