Risk appetite remains low after Fed Chairman Jerome Powell's recession rhetoric. European and American stock futures fell this morning, while Asian indices were flat. S&P 500 futures are down 0.3 percent this morning, while Euro Stoxx 50 futures are down 0.7 percent.
In Asia, Hong Kong Hang Seng stands out with 1 percent on news that the city's new leader will adopt a more open border policy.
With its low risk appetite, safe havens are still rallying today. The yield on two-year U.S. bonds fell to 3.06%, while the yen rose 0.6% against the dollar.
The Bloomberg Dollar Index is flat at 1.256.
Powell's recession comments
Powell did not rule out the possibility of a recession in his presentation to the US Senate. Answering the senators' questions after his speech, Powell stated that achieving a soft landing in the economy would be "very difficult" and said that there was a possibility of recession, but they did not want it.
Stating that inflation has surprised upwards and that more surprises may be on the way, Powell said that there is not much they can do about oil prices.
Powell's colleagues also made statements that did not exclude the possibility of a recession. Fed Member Patrick Harker said that the US could shrink for a few quarters, while he wanted to see the policy rate above 3 percent at the end of the year. Charles Evans stressed that the argument for another 75 basis point rate hike
would "make sense" at the next meeting.
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