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U.S. futures flat with caution ahead of Yellen and Q2 GDP revision

Published 08/26/2016, 06:56 AM
© Reuters.  Wall Street futures show caution ahead of Yellen's speech in Jackson Hole and GDP data
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Investing.com –Wall Street futures pointed to a flat open in wobbly trade on Friday with investors cautious ahead of the widely-anticipated speech from Federal Reserve (Fed) chair Janet Yellen at the Jackson Hole Economic Symposium and while waiting for an expected downward revision of second quarter gross domestic product (GDP).

The blue-chip Dow futures slipped 3 points, or 0.02%, by 10:53AM GMT, or 6:53AM ET, the S&P 500 futures inched down less than point, or 0.01%, while the tech-heavy Nasdaq 100 futures dropped 2 points, or 0.04%.

Markets were quiet on Friday as they waited for Yellen’s speech, to be delivered at 14:00GMT, or 10:00AM ET, to see if the Fed chief might give some clarity as to the timing for when the U.S. central bank could raise interest rates.

After a string of hawkish remarks over the last two weeks from various Fed officials, market participants were set to gauge Yellen’s own stance at the helm of the U.S. central bank, but experts were skeptical get the Fed chief would be willing to provide specific details.

Fed fund futures priced in the possibility of a rate hike for the September meeting at 27%, while odds for a move in December were 55.4%, according to Investing.com’s Fed Rate Monitor Tool.

The dollar was largely unchanged against rivals on Friday with investors unwilling to make large bets ahead of Yellen’s appearance.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.04% to 94.64 by 10:54AM GMT, or 6:54AM ET.

Meanwhile, market players looked ahead to revised figures on second quarter economic growth at 12:30GMT, or 8:30AM ET, on Friday. The data is expected to show that the economy expanded by 1.1% in the April-June period, downwardly revised from a preliminary estimate of 1.2%.

Besides the GDP report, the University of Michigan will release revised consumer sentiment numbers for August.

In oil markets, crude was lower in North American trade on Friday, as the Saudi energy minister shrugged off the need for OPEC to intervene to stabilize markets.

Saudi Arabian Energy Minister Khalid Al-Falih told Reuters late on Thursday that "we don't believe any significant intervention in the market is necessary other than to allow the forces of supply and demand to do the work for us", adding that the "market is moving in the right direction" already.

Meanwhile, market participants looked ahead to latest count of U.S. rigs in production from Baker Hughes out later on Friday. Last week, Baker Hughes said the number of rigs drilling for oil in the U.S. last week increased by 10 to 406, the eighth consecutive weekly rise and the 11th increase in 12 weeks, spurring concern over the global supply glut.

U.S. crude futures fell 0.34% to $47.17 by 10:54AM GMT, or 6:54AM ET, while Brent oil traded down 0.64% to $49.35.

Elsewhere, global stocks were mixed, but little changed on Friday, as investors around the world waited to see if Yellen would give indications of the Fed’s plans.

The exception to the general rule was the Nikkei 225, closing down more than 1% as Japan's consumer price index (CPI) fell by the most in more than three years in July, increasing pressure on the Bank of Japan (BoJ) to expand an already massive stimulus program.

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