Futures Lower ahead of Services PMI, Fed Speakers

US stocks are heading for a mildly weaker start as more sanctions are considered for Russia. ISM services PMI & Fed speakers are due later.

US futures

  • Dow futures -0.25% at 34845
  • S&P futures -0.23% at 4575
  • Nasdaq futures -0.64% at 15120

In Europe

  • FTSE -0.23% at 7553
  • Dax -0.69% at 14430
  • Euro Stoxx -0.84% ​​at 3928

More Russian sanctions

US stocks are pointing to a mildly lower start on the open after booking gains in the previous session and as the West considers imposing more sanctions on Russia.

The US has taken moves to prevent Russia from paying bondholders more than $600 million from reserves held at US banks. Russian reserves held in US institutions were frozen in a move that should force their hand to dip into foreign reserves.

Meanwhile, the EU is considering sanctions on Russian coal, although the bloc remains split over whether to apply sanctions on oil and gas.

Looking ahead US ISM services data is expected to show a strong expansion in the sector in March, with the PMI rising to 58, up from 56.5.

There are also plenty of Fed officials due to speak later, who could shed more light on the pace at which the Fed intends to hike interest rates this year.

Fed speakers come ahead of the release of the minutes from the latest FOMC meeting tomorrow.

In corporate news:

Yesterday, Twitter jumped 28% on the news that Ellon Musk had acquired a 9.2% stake in the social media platform. Today the stocks is expected to remain in focus after Musk posted a poll asking Twitter users whether they wanted an edit button.

Where next for the Nasdaq?

The Nasdaq has extended its rally from the mid-March low of 12950, ​​re-capturing the 20 and 50 sma before running into resistance at 15265. The price is consolidating between 14725 and 15265. The 20 sma has crossed above the 50 sma in a bullish signal, the RSI also suggests that there is more upside to be had. Buyers will look for a break over 15265 to bring 15660 the January 17 high into play and 16000 the 2022 high. Meanwhile, a break below support at 14725 the April low, would create a lower low and expose the 20 sma at 14370.

FX markets USD steadyies, GBP rises

USD is holding steady after gains in the previous session. Investors are sitting tight ahead of several Fed speakers later today and the minutes to the March FOMC which are due to be released tomorrow.

The euro trades just a few points lower than more sanctions are expected on Russia. On the data front the eurozone received a boost from re-opening in March as the composite PMI dipped to 54.9 in March, down from 55.5 in February, but above the preliminary reading of 54.5.

GBP/USD is rising after UK services enjoyed stronger than expected growth last month, despite surging prices, as the economy reopened after COVID restrictions. The services PMI rose to 62.6 in March up from 60.5 in February.

  • GBP/USD +0.15% at 1.3130
  • EUR/USD -0.05% at 1.0966

Oil edges higher after 5% gains yesterday

After rising 5% yesterday oil prices are edging modestly higher again today on the prospect of further sanctions against Moscow, in response to the alleged war crimes being committed in Ukraine.

The oil and gas sector will provide the clearest hit to the Russian economy but Europe’s dependence is a problem. The markets are nervous over the supply outlook.

Talks to revive the Iran nuclear deal have also stalled for now meaning that sanctions on Iranian oil are unlikely to be lifted anytime soon. Any signs that talks are on the move again could help ease supply fears.

  • WTI crude trades +0.6% at $103.20
  • Brent trades +0.7% at $107.73

Looking ahead

  • 14:45 Composite PMI
  • 15:00 Fed Brainard speaks
  • 15:00 ISM PMI services

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